SMH ETF drops nearly 18% after Broadcom AI warning
The VanEck Semiconductor ETF (SMH) just saw a nearly 18% drop over the past month, wiping out a chunk of the previous year's big gain of more than 75%.
This tumble comes after Broadcom warned about slower AI chip demand, memory chip prices slipped, and global smartphone sales forecasts got gloomy.
Plus, China's progress in making its own chips has added extra pressure on the whole sector.
SMH $67.7B tracks 25 chipmakers
SMH tracks an index of 25 major U.S.-listed chipmakers and holds $67.7 billion in assets.
NVIDIA makes up 21.7% of the portfolio, with TSMC and Broadcom also taking big slices.
Because the ETF leans heavily on AI-focused stocks, it reacts quickly to market shifts, especially as concerns mount that spending on AI infrastructure and consumer electronics may be slowing.
Concentrated holdings drive SMH volatility
Before the recent sell-off, SMH had gained more than 75% over the previous year.
But its focus on a handful of big players means it can swing up or down pretty fast whenever industry news hits.