Amazing Broadcom and SOXQ ETF Is My Tactical Bet On This Stock

🌟🌟🌟Broadcom $Broadcom(AVGO)$  has just joined the Trillion Dollar Club as its share price has reached a new high and is up a huge 24% in just 1 day!

CEO Hock Tan told investors that Broadcom's potential market for both its networking and ASIC offerings could rise to USD 90 billion over the next 2 years.    This is more than 4 times the current size of the market.  Broadcom also forecasts 1st quarter revenue above estimates on Thursday.

Big Tech's push to diversify beyond Nvidia's pricey and supply constrained AI processors has been a windfall for Broadcom  as it makes custom chips for major cloud companies.

In contrast $NVIDIA Corp(NVDA)$  is down 2.2% on Friday's trading and 3.3% in the past 5 days.  This is due to the fact that it is under investigation by the Chinese authorities for possible violations of its antimonopoly laws.

Broadcom also competes with Nvidia in data center AI networking gear and indicated that 2 large customers were developing their own next generation AI processors using Broadcom chips.

Nonetheless Nvidia is still the dominant market leader in AI chips and its share price is still up a massive 177% year todate.

As a small investor with limited resources, I believe that $Invesco PHLX Semiconductor ETF(SOXQ)$ is a better way to capture the fast growth of the semiconductor industry.  SOXQ is a low cost way to tap into the best Semiconductor stocks and it includes not only Nvidia and Broadcom but many other excellent Semiconductor stocks as well.

The Top 10 holdings include Nvidia, Broadcom, $Advanced Micro Devices(AMD)$  , Marvell Technology, TSMC, Micron Technology, Intel, Analog Devices, Lam Research, Qualcomm and Texas Instruments. 

The Top 10 holdings weight is 63% with Nvidia at 14%,  Broadcom at 11% followed by the rest.  The expense ratio is 0.19%.  This is the lowest among all the other competing ETFs.

SOXQ also pays dividends every 3 months.  It will go ex dividend on December 23 2024.  The current dividend yield is 0.53%.

I like SOXQ as it offers one of the lowest entry points to invest in this ETF.  At the last closing price it is just USD 40.61 per share.  In contrast $VanEck Semiconductor ETF(SMH)$  ETF is USD 249.59 while SOXX ETF is USD 223.30.

Performance wise SOXQ is up 3.4% on Friday's trading and 2.5% in the past 5 days.  SOXQ has now risen 28% year todate and in 2023, SOXQ is up 29%.  However if we look back to its inception date of June 12 2021, SOXQ has risen by 60%.

Wall Street Analysts are bullish on SOXQ with a Buy rating, Average Target price of USD 47.41, an upside potential of 16% according to Tipranks. 

SOXQ also does the heavy lifting for me by selecting the best performing Semiconductor stocks and weeding out the non performing ones.  There is no need for me to be worried about any negative news impacting each individual stock.  Neither is there a necessity to read company reports too.

I believe that it is important to be invested in semiconductor companies as they are the picks and shovels of the fast growing AI industry.  According to Statista, the AI Chip industry is expected to grow rapidly with projections indicating it will reach close to USD 92 billion by 2025 and USD 304 billion by 2030.

What an exciting time ahead for the semiconductor companies.  SOXQ represents the creme de la creme of these companies.   That is a powerful ETF to invest in.  Maximum value , Minimum cost!    That's SOXL in a nutshell!

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