AI will drive your semiconductor gains

Article Excerpt

The multi-billion-dollar semiconductor (computer chip) industry has seen spectacular growth over the past two decades. Demand for high-end computers and gaming accelerated during the peak COVID-19 period. Although the industry has now returned to more normal levels of operation,, manufacturers of specialized semiconductors continue to experience strong growth. That’s driven by the rapid implementation of artificial intelligence (AI) in numerous applications. In the Supplement on page 89, we expand on the medium-term prospects for the semiconductor industry. ISHARES SEMICONDUCTOR ETF $221.09 (Nasdaq symbol SOXX; TSINetwork ETF Rating: Aggressive; Market cap: $14.6 billion) tracks the ICE Semiconductor Index. It includes companies that design, manufacture, and distribute semiconductors as well as companies that provide services or materials used in the industry. Stock weights are determined based on market capitalization but individual stock weights are capped at 8%. The portfolio is rebalanced quarterly and reconstituted annually. The ETF holds 30 companies with 58% of the assets allocated to the top 10 stocks; top holdings include Broadcom (9.4% of…