If your goal is to capitalize on the artificial intelligence bull market, your first thought might be to buy a broad technology sector exchange-traded fund or a thematic AI ETF. However, both are more generalist options that hold a wide mix of tech companies, some only loosely tied to AI development.
To get more targeted exposure, investors can drill deeper into the individual components of the AI value chain. Some ETFs focus on software developers building their own large language models or investing in AI startups like OpenAI and Anthropic.
[Sign up for stock news with our Invested newsletter.]
Others focus on infrastructure, such as real estate investment trust (REIT) ETFs that own data centers and telecommunications towers. These are the critical real assets powering cloud computing and AI workloads.
But the highest growth opportunity in recent years has come from the companies designing and manufacturing the chips behind every AI application. These are known as semiconductors — materials that conduct electricity only under certain conditions. This property makes them ideal for controlling electrical signals and forming the building blocks of modern computing.
“The semiconductor industry is undergoing its biggest shift in decades,” says Tejas Dessai, director of thematic research at Global X ETFs. “AI is reshaping computing, creating demand for specialized hardware while displacing legacy components.”
Semiconductors are used at every stage of the AI value chain, from graphics processing units (GPUs) that train models in hyperscaler data centers to high-efficiency chips used in consumer electronics.
“This shift is most visible on three fronts: the transition from general-purpose processors to AI-optimized chips, the use of high-bandwidth memory to handle AI’s data intensity and the rise of ultra-fast interconnect solutions that bind AI servers together,” Dessai explains. “Combined, these shifts mark a structural reset likely to define the semiconductor sector for decades.”
If this is the segment of the AI economy you want to target, semiconductor ETFs offer a direct way to gain that exposure. While many technology or AI-themed ETFs include chipmakers among their top holdings, pure-play semiconductor ETFs focus exclusively on the firms designing and fabricating the hardware driving today’s AI revolution.
Here are seven of the best semiconductor ETFs to buy today:
| ETF | Expense ratio |
| iShares Semiconductor ETF (ticker: SOXX) | 0.34% |
| VanEck Semiconductor ETF (SMH) | 0.35% |
| VanEck Fabless Semiconductor ETF (SMHX) | 0.35% |
| Invesco PHLX Semiconductor ETF (SOXQ) | 0.19% |
| Global X AI Semiconductor & Quantum ETF (CHPX) | 0.50% |
| SPDR S&P Semiconductor ETF (XSD) | 0.35% |
| Direxion Daily Semiconductor Bull 3X Shares (SOXL) | 0.75% |
iShares Semiconductor ETF (SOXX)
“The potential benefits of investing in semiconductor ETFs include exposure to a high-growth sector with strong fundamentals, diversification across multiple companies in the industry and the potential for long-term capital appreciation,” says Sean August, CEO of August Wealth Management Group. For example, SOXX has delivered a market-beating annualized total return of 27.2% over the past decade.
“When looking for semiconductor ETFs, investors should consider factors such as the expense ratio, the underlying index or benchmark, the fund’s holdings and diversification strategy, and the ETF’s historical performance,” August says. “It is also important to assess the fund’s liquidity to ensure that it is easy to buy and sell.” SOXX meets these criteria, with a 0.02% bid-ask spread and a 0.34% expense ratio.
VanEck Semiconductor ETF (SMH)
“Semiconductors continue to be a cornerstone for innovation, especially as AI models grow more powerful,” says Nick Frasse, product manager at asset manager VanEck. “We’re closely watching compute and scaling laws — the trend of continuously increasing processing power — which strongly supports sustained semiconductor demand.” For semiconductors, VanEck offers SMH.
SMH tracks the MVIS US Listed Semiconductor 25 Index, which emphasizes the largest and most liquid companies. However, investors should be aware of concentration risk, as the ETF’s market-cap weighted methodology results in a 18.7% allocation to Nvidia Corp. (NVDA). That being said, the ETF’s ability to “let winners run” has helped it outperform SOXX over the past decade, with a 31.1% annualized return.
VanEck Fabless Semiconductor ETF (SMHX)
“Geopolitical tensions and tariffs have made semiconductor supply chains more complicated, driving companies toward diversifying and localizing manufacturing,” Frasse explains. While investors can hand-pick U.S.-based reshoring plays, another approach is to skip manufacturers entirely and focus on the chip designers themselves. SMHX is the semiconductor ETF to consider if this is a priority.
“The semiconductor industry continues to evolve rapidly, driven by fabless companies that prioritize chip design and innovation while outsourcing production,” Frasse adds. “This model allows firms like Nvidia to invest heavily in research and development, keeping capital expenditures low and maintaining agility in responding to market shifts.” SMHX charges the same 0.35% expense ratio as SMH.
Invesco PHLX Semiconductor ETF (SOXQ)
“While certain segments of the semiconductor market, like memory, may be facing pressure due to oversupply concerns, the longer-term growth potential driven by advancements in AI, autonomous driving and high-performance computing remains strong,” says Rene Reyna, head of thematic and specialty product strategy at Invesco. The firm offers SOXQ as a competitor to SMH and SOXX.
SOXQ tracks the PHLX Semiconductor Sector Index, which owns the 30 largest U.S.-listed semiconductor firms, including some international stocks trading as American depositary receipts (ADRs). This Invesco semiconductor ETF undercuts its VanEck and iShares counterparts with a far lower 0.19% expense ratio. For a $10,000 investment, this amounts to $19 annually in fee drag versus $35 for SMH and SMHX, and $34 for SOXX.
[Read: 7 Best Tech ETFs to Buy in 2025]
Global X AI Semiconductor & Quantum ETF (CHPX)
“CHPX provides exposure to companies across the entire global compute stack, from AI semiconductors to data center equipment, power infrastructure and quantum technologies,” Dessai says. “This offers a more holistic view of the long-term computing ecosystem rather than a narrow slice of it.” CHPX is a relatively new ETF, with just over $10 million in assets, against a 0.5% expense ratio.
Where CHPX differs from other semiconductor ETFs is its explicit allocation to quantum technology stocks. This segment represents a high-risk, high-reward bet on the next generation of computing. Many quantum companies are still in early stages of development with limited or no revenue, but if the technology fulfills its potential, the payoff could be significant for successful firms.
SPDR S&P Semiconductor ETF (XSD)
Market-cap-weighted ETFs naturally allocate more to larger stocks that have performed well. However, this approach mostly benefits early investors. Buying in today often means accepting significant concentration risk, as a handful of large-cap names dominate index performance. At this stage in the semiconductor supercycle, an equal-weighted ETF like XSD may offer a better balance of risk and return.
XSD tracks the S&P Semiconductor Select Industry Index, which includes 40 stocks. Each holding is periodically rebalanced to equal weights, meaning the fund systematically trims outperformers and adds to laggards. This results in less exposure to mega-cap chipmakers and greater representation of small- and mid-cap firms that could be tomorrow’s leaders. The ETF charges a 0.35% expense ratio.
Direxion Daily Semiconductor Bull 3X Shares (SOXL)
“Semiconductors are the engine powering the AI revolution and the modern global economy,” says Mo Sparks, chief product officer at Direxion. “Be it through trillion-dollar market caps, earnings surprises and misses, tariffs, or broader geopolitical events, today’s traders have plenty of catalysts and volatility to guide their daily conviction.” In lieu of call options on SMH or SOXX, bullish traders can use SOXL.
This ETF is leveraged three times to the daily price movements of the NYSE Semiconductor Index, which is achieved by the use of swaps. “Belief that AI and semiconductors will continue to drive economic expansion, paired with recent earnings that spotlighted continued opportunity and gigantic capex spending from technology companies, is likely all the conviction a bullish trader needs,” Sparks says.
More from U.S. News
10 Best Tech Stocks to Buy for 2025
10 Best Industrial Stocks to Buy
The 5 Best Robotaxi Stocks That Aren’t Tesla
7 Best Semiconductor ETFs to Buy in 2025 originally appeared on usnews.com
Update 11/11/25: This story was published at an earlier date and has been updated with new information.
