The semiconductor ETFs could turn $250,000 into a million with AMD, Nvidia, and Broadcom.

Key Points

• The semiconductor industry is the beating heart of the artificial intelligence revolution.
• Nvidia, AMD, and Broadcom supply some of the best chips for AI data centers.
• The Semiconductor ETF could generate spectacular long-term returns with these companies.

Damn, what a juicy opportunity! Most AI development takes place in data centers filled with thousands of chips specifically designed by suppliers like Nvidia, AMD, and Broadcom. For AI models to continue improving, they need more computing power to process ever-increasing volumes of data at faster speeds.

Jensen Huang himself, the CEO of Nvidia, believes that the latest reasoning models could drive a $4 trillion boom in AI infrastructure by 2030. If this is true, wouldn't it be foolish not to have a piece of the semiconductor pie?

The Semiconductor ETF invests exclusively in companies that supply chips and other hardware components. It manages a highly concentrated portfolio of only 30 stocks, with AMD, Nvidia, and Broadcom among its top holdings.

A complete portfolio of hardware stocks for AI

The top three positions of the ETF should not surprise anyone:

Action | Weighting in ETF --- | ---

1. AMD | 9.77%
2. Nvidia | 8.57%
3. Broadcom | 8.17%

AMD's new line of GPUs, the MI350 series, is being adopted by data center operators like Oracle. And wait until you see what comes in 2026 with the MI400, which could be 10 times more powerful! AMD is also dominating the AI chip market for personal computers, which could be huge in the future.

Although AMD is making strong strides, Nvidia still has the advantage in data centers thanks to its Blackwell Ultra GPUs, which are the benchmark for AI reasoning models. These chips are 50 times more powerful than the original Hopper from 2023. Nvidia generates about 12 times more revenue in data centers than AMD! That's dominating a market, folks.

Broadcom designs custom AI accelerators for cloud providers like Google. It is also a leader in networking equipment for data centers with its latest Ethernet switch, Tomahawk Ultra, which offers the lowest latency and highest performance to accelerate AI processing.

Since the beginning of 2023, these three stocks have delivered an average return of 550%, crushing the S&P 500.

Turning $250,000 into a million

The Semiconductor ETF has delivered a compounded annual return of 11.4% since its inception in 2001, comfortably outperforming the 8.5% of the S&P 500 over the same period.

And in the last 10 years, it generated an impressive 24.1% annually, thanks to technologies such as cloud computing, enterprise software, and AI, which continue to drive explosive demand for chips.

Initial investment | Annual return | Time to reach $1 million --- | --- | --- $250,000 | 11.4% | 13 years $250,000 | 17.7% | 9 years $250,000 | 24.1% | 7 years

A sustained long-term performance of 24.1% would be asking a lot from any ETF, because infinite growth does not exist. Nvidia, for example, is already the largest company in the world and its growth is beginning to slow down.

But the semiconductor industry as a whole can still grow substantially if spending on AI infrastructure reaches $4 trillion by 2030, as predicted by Jensen Huang. This ETF remains an excellent buy, although adding it to a diversified portfolio could protect you against the typical volatility of high-growth industries like AI.

The best part is that you don't need to be a millionaire to start. Any initial amount can multiply by four if this scenario unfolds as expected. Are you going to miss it?

Note: This article is for informational purposes only. Past performance does not guarantee future results.

AI Hardware: The new gold of the 21st century.

Recommended Articles

[Bitcoin must break through this critical level to continue rising, according to analyst] [The dream of $21 billion Ripples: What it means to capture 20% of SWIFT's volume for XRP] [OpenAI explores stock sale with a valuation of $500 billion]