To The Moon

🌟🌟🌟Semiconductor stocks  are the hottest stocks  with the advent of AI recently. The best semiconductor stock is $NVIDIA Corp(NVDA)$  which is up a whopping 92% year todate!  However at the last closing price of USD 925.61 per share, Nvidia is too expensive for small investors like me.  

I find that $VanEck Vectors Semiconductor ETF(SMH)$ is a great alternative way to invest in Nvidia as Nvidia is the Top Holding with 24.5% weightage.  In addition to Nvidia I also gain exposure to other great semiconductor stocks all nicely packaged  into 1 awesome basket  for only USD 224.97 per share.

SMH tracks a market cap weighted index of 26 of the largest US listed Semiconductor companies.  Assets Under Management is currently USD 18.61 billion. 

Apart from Nvidia, the Top 10 holdings include $Taiwan Semiconductor Manufacturing(TSM)$  Broadcom, $Advanced Micro Devices(AMD)$  ASML, Lam Research, Applied Materials, $Intel(INTC)$   Qualcomm and Analog Devices.

The Top 10 weightage is 72%.

The expense ratio is 0.35%.  SMH pays dividends once a year.  The current dividend yield is 0.46%.

Nvidia is the market leader due to its specialised GPUs which are used for AI  machine learning.  These AI chips are in high demand and  command high prices too.   The latest Nvidia chip is the new Blackwell B200 chip, made up of 208 billion transistors.  It will be faster and more powerful than its older model, the USD 40,000 Grace Hopper  H100 chip. 

TSMC is the world's largest foundry that makes the smallest and most advanced chips in the world.  TSMC's Top 10 customers include Nvidia, Apple, AMD, Qualcomm and  Broadcom. 

AMD is Nvidia 's closest competitor in AI chips.  While Nvidia's H100 AI chips cost up to 4 times more than AMD' s competing MI300X, AMD is still on track to generate billions on its Instinct MI300 GPUs in 2024.  The MI300 Chip costs USD 10,000 to USD 15,000 each, offering better value for money. 

A recent report last Sunday said that China will ban chips of  Intel and AMD.  Both AMD and Intel share prices have dropped as a result.  AMD and Intel have  dropped by 2% each this week.

Intel is a beneficiary of the US Chips and Science Act as it has been awarded up to USD 8.5 billion to build additional factories.  Intel could receive an additional USD 11 billion in loans from the Chips and Science Act this week according to a CNBC report. 

Intel's Ohio Factory will cost more than USD 20 billion and expected to start production in 2027 or 2028 according to CEO Pat Gelsinger. 

Performance wise SMH is up 2.8% in the past 5 days and 33% year todate.  In 2023 SMH has risen an impressive 78%.  Wall Street Analysts are bullish on SMH and rated it as a strong Buy with Target price of USD 242.13, an upside potential of 8% according to Tipranks. 

While Nvidia is taking the market by storm, SMH has also benefited tremendously from Nvidia's rise.  I believe that SMH has lots of exponential growth ahead with the advent of AI which is still in its nascent stage.  

I like that SMH is not US centric but also has a global exposure too.  For what it offers, SMH is great value for my hard earned dollars and gives me excellent exposure to the best semiconductor companies in the world.   At the same time SMH minimises my risk on investing in single stocks.  How good is that! 

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