The semiconductor sector is once again lighting up with momentum – and this time, it’s not just about Nvidia.
According to Validea’s latest ETF Breakout Alert (as of May 30, 2025), three semiconductor-focused ETFs have emerged as standouts in terms of recent price strength, relative performance, and trend signals:
- SPDR S&P Semiconductor ETF (XSD)
- VanEck Semiconductor ETF (SMH)
- Invesco PHLX Semiconductor ETF (SOXQ)
All three have posted 15%-18% gains in the past month, dramatically outperforming the 5.2% average monthly return for their respective Large-Cap ETF categories. Each is now trading over 11% above its 50-day moving average, with one (SOXQ) even pushing back above its 200-day average – a sign often associated with longer-term trend reversals.
Let’s take a closer look.
| ETF | 1-Month Return | Above 50-Day MA | Assets | Expense Ratio | Holdings |
|---|---|---|---|---|---|
| XSD | +18.5% | +11.6% | $1.5B | 0.35% | 40 |
| SMH | +16.1% | +11.97% | $22.3B | 0.35% | 27 |
| SOXQ | +15.9% | +11.41% | $362M | 0.19% | 30 |
Each ETF brings a unique approach to semiconductor exposure:
- XSD follows an equal-weight methodology, giving smaller semiconductor names a larger voice than typical market-cap weighted funds.
- SMH, with over $22 billion in assets, is a behemoth in the space and provides concentrated exposure to industry giants like Nvidia, Broadcom, and Taiwan Semiconductor.
- SOXQ mirrors the PHLX Semiconductor Index and boasts the lowest expense ratio among the three, making it a potential choice for cost-conscious investors.
💡 Why the Breakout Matters
The semiconductor sector has become a bellwether for everything from artificial intelligence to consumer electronics and industrial automation. As demand for AI chips, data center hardware, and next-gen devices surges, so too does investor enthusiasm for the companies powering those advances.
Importantly, these ETF breakouts aren’t just about performance chasing. The fact that all three are outperforming both on absolute and relative trend metrics suggests that institutional capital may be rotating back into the sector after a period of consolidation.
Also worth noting:
- SOXQ just reclaimed its 200-day moving average, a technical milestone that often signals the start of a new uptrend.
- SMH and XSD are within 13%-17% of their 52-week highs, meaning further upside may still be ahead.
While momentum is clearly building, semiconductors are a notoriously cyclical industry. Investors should be mindful of macroeconomic headwinds (like tightening credit conditions) and company-specific risks (such as inventory gluts or regulatory restrictions on chip exports).
Validea’s research shows that momentum-based signals – while powerful – work best when combined with fundamental and valuation metrics. For investors looking to do deeper diligence, our ETF Factor Reports for each of these funds offer a breakdown of quality, value, momentum, and volatility characteristics.
