This Sector Has Dominated ETF Returns So Far in 2026
Written by Dana George for The Motley Fool -> Semiconductors and AI are intricately linked. While money is being made, it’s important not to get caught up in the hype. As hot as this sector is now, it’s not the right investment for everyone. So far this year, semiconductors a
While money is being made, it’s important not to get caught up in the hype.
As hot as this sector is now, it’s not the right investment for everyone.
So far this year, semiconductors and the physical infrastructure of artificial intelligence (AI) are dominating the exchange-traded fund (ETF) scene. For example, the iShares Semiconductor ETF (NASDAQ: SOXX) is up 89% year to date. Given the intense interest -- and investments -- in AI, this makes sense.
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Semiconductors and AI reinforce each other in a tight loop. AI depends on ever more sophisticated chips to run. Now, AI is changing how chips are designed and where they're manufactured. In short, AI is designed to perform tasks that normally require human intelligence, and semiconductors are the physical devices that enable it to do so.
Driven by AI and data-center demand, the chip industry is in a powerful up cycle. With large cloud providers spending heavily on AI infrastructure, the entire semiconductor value chain is lifted. Greater demand for central processors, graphics processors, power management, memory, and manufacturing equipment is like catnip to investors -- so much so that semiconductor revenue reached $298.5 billion in the first quarter of 2026, up a staggering 25% from the fourth quarter of 2025.
As a passively managed ETF, the iShares Semiconductor ETF provides exposure to large-cap and mid-cap companies, primarily through U.S.-listed stocks. It tracks the NYSE Semiconductor Index and currently holds a concentrated basket of 30 stocks.
Top holdings include industry leaders such as Micron Technology , Advanced Micro Devices , and Marvell Technology .
