SMH ETF: NASDAQ:SMH Hovering at $350 With AI, NVDA and CHIPS Act Fueling the Next Move

SMH ETF – High-Octane Semiconductor ETF Riding AI, Trading Around $350 With Deep NVDA/AVGO Concentration

Current setup and price action for NASDAQ:SMH

NASDAQ:SMH is trading around $350.79, down $2.11 (-0.60%) on the day, after a previous close at $352.90 and an intraday range of $348.31–$354.39. The 52-week range stretches from $170.11 at the low to $375.59 at the high, so even after the pullback the fund is still sitting slightly below its peak and more than +100% above the trough. Year to date, the share price is up a little over 50%, reflecting how aggressively capital has chased the semiconductor and AI infrastructure trade in 2025. Assets under management are roughly $37 billion, and with an average volume of 8.21M shares and a quoted median bid–ask spread around 0.02%, SMH ETF trades like a highly liquid institutional vehicle, not a niche thematic side bet. The expense ratio is 0.35%, which is not “cheap beta”, but acceptable for a concentrated, sector-specific ETF that gives direct exposure to the semiconductor value chain instead of the broader tech complex.

Portfolio structure – SMH ETF is a leveraged bet on the AI spine of the market
The portfolio of NASDAQ:SMH is intentionally tight: about 25–26 holdings, with the top 10 names controlling roughly 75% of assets, and the bottom 10 stocks only ~8%. This is not diversification; it is a high-conviction sector basket. Advanced semiconductor names account for about 38% of net assets, and semiconductor capital equipment another 28%, so almost two-thirds of the ETF is directly tied to cutting-edge chips and the tools required to manufacture them. On the geographic side, roughly 81% of exposure is to U.S. companies, around 9.50% to Taiwan, and 6.86% to the Netherlands. That mix puts SMH ETF squarely on the U.S. onshoring plus AI acceleration thesis while still leaving material dependence on Asian foundry and Dutch lithography capacity.

Heavyweights inside NASDAQ:SMH – NVDA, TSM and AVGO drive the outcome
The three anchors inside NASDAQ:SMH are NVIDIA (NVDA) at about 16.47% of the fund, Taiwan Semiconductor (TSM) around 9.45%, and Broadcom (AVGO) near 8.87%. Together those three positions alone are roughly 34–35% of the ETF. Add in other large-cap names like Intel (INTC), Micron (MU), and key capital-equipment makers, and it is obvious that SMH ETF is essentially a structured way to own the core of the AI infrastructure stack. The valuation backdrop is aggressive but not absurd for this phase of the cycle: the aggregate P/E multiple sits around 29x as of early December 2025, against a backdrop of earnings growth driven by AI accelerators, custom chips, and secular chip content growth in autos, industrials, and data centers.

AI infrastructure pipeline – why SMH still has growth momentum baked in

The primary reason NASDAQ:SMH has run to $350+ and still attracts Buy ratings is the visible multi-year AI capex pipeline. Broadcom (AVGO) is scaling custom chips deals with Anthropic and OpenAI to power next-generation model training and inference. Alphabet (GOOG) has committed to supply Anthropic with TPUs for a 1GW data center, directly supporting demand for advanced chips and supporting hardware that sit inside SMH ETF holdings. NVIDIA (NVDA) and Advanced Micro Devices (AMD) have secured multiple gigawatts of AI accelerator capacity for OpenAI in 2025, front-loading orders that stretch well into 2026 and beyond. That volume of booked capacity is what justifies a semiconductor sector ETF rallying more than 50% YTD, even as headlines talk about “AI fatigue” or rotation. Micron (MU) is lined up as a beneficiary on the memory side, with stronger pricing for DRAM and NAND reported by integrators such as HPE and DELL, setting up Micron’s December 17 earnings as another potential catalyst for SMH ETF given its exposure to memory and high-bandwidth solutions.

Policy tailwinds and onshoring – CHIPS Act and domestic build-out
On the structural side, NASDAQ:SMH is leveraged to the U.S. push to bring chip manufacturing closer to home. The U.S. CHIPS and Science Act earmarked roughly $280 billion for semiconductor manufacturing and R&D, and SMH ETF holds several direct beneficiaries. Micron (MU) is using CHIPS support to build new foundries in Idaho and New York. Intel (INTC) not only received funding but also struck a deal that gives the U.S. federal government direct ownership stakes in exchange for CHIPS support, tying Intel’s balance sheet and capex plan even more tightly to national-security policy. With 81% of SMH holdings domiciled in the U.S., that fiscal and regulatory backing is a real asset: it helps justify a 29x earnings multiple on the ETF at $350.79, because the probability of sustained domestic investment into fabs, packaging and advanced nodes is high.

China export approvals, tariffs and regional production – nuanced upside for SMH ETF

One of the more underpriced tailwinds has been the U.S. government approval for NVIDIA to export H200 GPUs to China, subject to a 25% export fee. The H200 is more advanced than earlier constrained H20 variants, so every incremental shipment into China adds higher-margin revenue for NVDA, which is 16.47% of NASDAQ:SMH. At the same time, tariff risks on power and analog semis are partially mitigated because firms like Texas Instruments (TXN) manufacture mainly in the U.S., while Monolithic Power Systems (MPWR) is more tied to Chinese production. Retail investors often overreact to headline tariff noise, but the actual cost exposure tends to be local to the manufacturing base, so the impact on blended margins across the SMH ETF basket can be less severe than feared. That nuance matters when you’re deciding whether SMH at $350–$355 is still interesting after a +50% run.

Demand beyond AI – analog, power and the broader semiconductor stack
Even though generative AI dominates headlines, NASDAQ:SMH is not a pure “HPC only” play. About 28% of assets sit in semiconductor capital equipment and another large slice in analog and power semiconductors. Data centers being built for AI workloads need enormous amounts of power distribution equipment, switchgear, and control electronics, which feed directly into demand for companies like TXN, MPWR, and Analog Devices (ADI). On top of that, the same chips that run AI data centers sit alongside power and analog components in EVs, autonomous driving platforms, industrial robotics, drones, and consumer electronics. When global semiconductor sales are projected to rise roughly 25% year-over-year by 2026 toward an approximately $975 billion market, that’s not only GPUs; it’s every layer of the stack that SMH ETF holds. That breadth of end-markets is one reason the ETF has pushed to a 52-week high of $375.59 even as some AI-only names have seen sharper drawdowns on single earnings headlines.

Risk block – concentration, overlap and macro/geopolitical shocks

The clean narrative around NASDAQ:SMH comes with non-trivial risk. The ETF has only about 25 stocks, with NVDA (16.47%) and AVGO (8.87%) dominating. If you already own the S&P 500 (SPY), you are likely holding 7.82% NVDA and 3.30% AVGO there as well, which means that adding SMH ETF at $350.79 can quickly push your effective exposure to those two names above 15–20% of your equity risk budget. That concentration is the main portfolio-construction problem: if NVDA or TSM trade through downside catalysts – export restrictions, delayed hyperscaler orders, or process hiccups – SMH will feel it directly. Geopolitics is the other big overhang. Roughly 9.50% of the ETF is linked to Taiwan, and the advanced chip supply chain is still heavily dependent on Taiwanese and Chinese capacity. Any escalation around Taiwan, or a renewed push for 100% tariffs on semiconductors, would hit both revenues and supply chains. Combine that with regulatory uncertainty around the CHIPS Act under the new administration – including the possibility that parts of the program are watered down or re-prioritized – and it’s clear that SMH ETF at 29x earnings is not priced for a smooth geopolitical path. Finally, there is pure demand risk: if AI spending moderates, if LLM economics compress as models commoditize, or if global consumer and enterprise spending soften, then semiconductor unit growth and pricing power can normalize quickly. At $350–$375 per share and more than +50% YTD, there is limited room for disappointment.

Valuation, performance and where NASDAQ:SMH sits in the cycle

From a factor perspective, NASDAQ:SMH today is a momentum-growth sector ETF with a valuation multiple that embeds robust earnings growth into 2026. A 29x P/E on a basket that has already rallied ~50% this year, with a 52-week band of $170.11–$375.59, tells you the market is paying up for scarcity in true AI infrastructure exposure. The fund’s $37B AUM, a 0.35% fee, and near-frictionless trading with 8.21M average daily volume make it a liquid way for institutions to rotate into or out of the semiconductor complex quickly. On longer lookback windows, peers like XSD and SOXX, which hold 41 and 35 names respectively, have underperformed SMH ETF, precisely because they are less concentrated in the top AI winners. That outperformance is the reward for taking concentration risk; the question at $350.79 is whether that trade still pays enough going forward relative to the embedded risk.

My stance on NASDAQ:SMH – bullish, but only as a tightly sized growth weapon

Putting all of this together – current price around $350.79, 52-week high at $375.59, YTD gain above 50%, 29x earnings, top three positions ~35% of assets, 81% U.S. exposure, direct leverage to $280B+ CHIPS Act spending, multi-gigawatt AI accelerator commitments from NVDA and AMD, custom chip momentum at AVGO, and tangible demand in analog and power – my view is clear. NASDAQ:SMH is a Buy with a bullish bias, but only as a small, deliberate allocation in a diversified portfolio. For me, sizing in the 1–2% of total portfolio range is appropriate: big enough to benefit if the AI infrastructure and onshoring story continues to play out and pushes SMH ETF back toward or above the $375.59 high, but constrained enough that a shock scenario – Taiwan escalation, CHIPS reversal, or a sharp de-rating of NVDA/AVGO/TSM – doesn’t blow up overall risk. At $350.79, you are not getting a bargain, you are paying for concentrated exposure to the core of the semiconductor and AI stack. If you accept that trade-off and size correctly, SMH is a justified Buy, not a passive hold and definitely not a low-risk income ETF.

That's TradingNEWS