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The AI trade just got a wider cast
Semiconductor ETFs are still doing what they do best lately: climbing like there’s a Wi‑Fi password taped to the summit. On Tuesday, the VanEck Semiconductor ETF (SMH) hit new highs and is on pace for its strongest quarterly run ever, while SOXX also pushed to an all-time high.
What’s fueling the glow-up? Simple: investors keep betting that AI infrastructure spending isn’t a fad, it’s a giant, expensive shopping spree that still has receipts to burn.
Micron just changed the vibe
The real plot twist came from Micron. UBS basically looked at the memory-chip maker and said, “What if this isn’t a normal chip cycle anymore?” The bank more than tripled its price target to $1,625 from $535, arguing that high-bandwidth memory, or HBM, is turning Micron into a structural AI beneficiary instead of a classic boom-bust DRAM story.
That matters because HBM is the stuff powering AI servers and accelerators. In other words: the picks and shovels of the picks and shovels trade.
Why ETF investors should care
When a name like Micron rips, it can change the whole market’s mood. Suddenly the AI rally doesn’t look like it lives and dies with Nvidia alone. It starts to look like a broader supply-chain story, with winners spread across:
- memory chips
- AI accelerators
- foundries and manufacturing
- data-center infrastructure
That’s good news for funds like SMH and SOXX, which hold a basket of these names and let investors own the theme without trying to guess which chip gets the next fireworks show.
The bigger takeaway
Goldman’s latest spending estimate adds more fuel, pegging annualized AI-related spending at $650 billion in Q1 and maybe $800 billion by year-end. If that forecast holds, this rally may have more legs than your average meme-stock sprint.
Big picture: the AI trade is maturing. It’s no longer just “buy Nvidia and pray.” It’s becoming a full-blown infrastructure cycle — and that usually means more companies, more winners, and a lot more room for surprises.