The semiconductor industry faces uncertainty due to U.S.-China trade tensions and the introduction of China's AI competitor, DeepSeek, impacting SOXX's short-term performance. SOXX's momentum has dropped significantly, reflecting recent economic events, but its long-term performance remains strong, warranting a hold rating for now. DeepSeek's emergence challenges OpenAI, potentially spurring innovation in AI, but raises concerns about Chinese censorship and national security.
The author recommends holding the SOXX ETF, which aims to provide exposure to the semiconductor companies segment. Chinese startup DeepSeek has launched its R1 model, which has outperformed competitors like ChatGPT, raising questions about America's leadership in AI and reducing the immediate appeal of semiconductor ETFs. Even with declines in semiconductor stocks, valuation multiples remain above the historical average, and semiconductor ETFs, such as SOXX, are considered risky in this scenario.
Artificial intelligence (AI) is moving fast. It was only two years ago that OpenAI's GPT-3.5 models sparked the AI arms race, and the pace of innovation has since been staggering.
A smart beta exchange traded fund, the iShares Semiconductor ETF (SOXX) debuted on 07/10/2001, and offers broad exposure to the Technology ETFs category of the market.
Artificial intelligence (AI) could be the most transformational technology in a generation. AI chatbots like OpenAI's ChatGPT can already answer complex questions and instantly generate computer-generated text, images, and even new software code on command.
Looking for broad exposure to the Technology - Semiconductors segment of the equity market? You should consider the iShares Semiconductor ETF (SOXX), a passively managed exchange traded fund launched on 07/10/2001.
The semiconductor sector is poised for a cyclical recovery, boosted by AI development with EPS growth forecasted at 32% for 2025. Despite a 12-month gain of 30%, the sector remains attractively valued with a 25% upside potential for 2025, supported by consensus price targets. The sector's high EPS growth does not come at an expensive price, with a 23x P/E target under a 1.0x PEG ratio, indicating room for expansion.
Artificial intelligence (AI) might be the most revolutionary technology in a generation. Depending on which Wall Street forecast you rely on, AI could add $7 trillion (Goldman Sachs), $15.7 trillion (PwC), or even $200 trillion (Ark Investment Management) to the global economy over the coming decade.
SOXX has had an underwhelming 2024. It is closely correlated to MSFT which shows how much it relies on the hyperscalers. A large head and shoulders top is forming and the uptrend channel has broken. The technicals reflect a potential bearish shift.
The iShares Semiconductor ETF (SOXX) was launched on 07/10/2001, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
Investing in ETFs can be a powerful way to diversify your portfolio, but knowing which ones to buy (and which to sell) is an important question to ask.
This exchange-traded fund could be a millionaire-maker as the artificial intelligence revolution gathers steam.