VanEck Semiconductor ETF Hits All-Time High While IGV Software ETF Declines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
0mins
Should l Buy NVDA?
Source: CNBC
- Strong Semiconductor ETF Performance: The VanEck Semiconductor ETF (SMH) has surged over 140% in the past nine months, mirroring the recovery seen after the 2020 pandemic lows, which has helped maintain the overall market near its highs.
- Software ETF Continues Decline: The iShares Expanded Tech-Software Sector ETF (IGV) fell to its lowest level since April 2025 on Wednesday, breaking below a clear topping pattern, reflecting weakness in the software sector that may impact investor confidence.
- Relative Strength Indicator Hits All-Time Low: The relative strength index (RSI) of IGV versus SMH has dropped to 15, marking a historic low, indicating extreme weakness in the software ETF and potential for a bounce in the near term.
- Significant Market Rotation: The stark contrast between the strong performance of the semiconductor sector and the ongoing decline of the software sector highlights notable internal market rotation, prompting investors to closely monitor future trend changes.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 187.980
Low
200.00
Averages
264.97
High
352.00
Current: 187.980
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Growing Market Demand: Expected capital expenditures from cloud service providers are projected to reach $650B in 2026, up from over $400B in 2025, reflecting sustained demand for Nvidia's products.
- New Product Outlook: The average selling price for Vera Rubin is expected to be 40% to 50% higher than that of GB300, potentially adding around $8B in revenue for Nvidia, further solidifying its market leadership.
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- Weak Market Performance: Since August 2025, Nvidia's stock has only risen by 5%, significantly lagging behind the S&P 500's 10% gain, indicating market caution regarding its future growth despite optimistic prospects in the AI sector.
- Surge in Capital Expenditures: Amazon, Alphabet, and Meta expect to spend at least $500 billion in capital expenditures in 2026, positioning Nvidia as a primary beneficiary; if it maintains its market share, it could see substantial revenue growth, with global data center capital expenditures projected to reach $3 trillion to $4 trillion by 2030.
- China Market Resumption: Nvidia has regained the ability to export GPUs to China, re-entering the world's second-largest AI market; although the stock has not significantly reacted to this positive development, it provides new momentum for future growth.
- Attractive Valuation: With a forward P/E ratio of less than 24, Nvidia's stock appears cheap compared to the S&P 500's 21.9, suggesting that investors should consider buying during this pullback, especially with upcoming spending increases on the horizon.
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- Digital Advertising Growth: Walmart's digital business grew by 27% in the U.S. in the fourth quarter and has posted double-digit percentage gains for 15 consecutive quarters, indicating strong performance in e-commerce and a focus on higher-margin businesses, despite losing its market leadership.
- AI Strategic Initiatives: Walmart's partnerships with OpenAI and Google to launch the AI shopping assistant Sparky enhance customer experience, with users reporting a 35% higher average order value, highlighting the potential and importance of AI in retail.
- Amazon's AI Investments: Amazon plans to spend up to $200 billion on AI infrastructure in 2023, and despite market skepticism regarding its capital expenditures, its AI assistant Rufus has generated nearly $12 billion in incremental annualized sales, demonstrating its strong commitment to AI development.
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- Market Milestones: The S&P 500 recently hit the 7,000 mark but failed to close above it, indicating market fragility at high levels, which could affect investor confidence and lead to short-term volatility.
- Sector Leadership Shift: In 2026, sectors like energy, materials, and staples have shown impressive gains of 22.5%, 16.9%, and 13.3%, respectively, but these sectors typically lead near market tops, suggesting current leadership may lack sustainability.
- Healthcare Sector Recovery: The healthcare ETF (XLV) is up only 1.9% year-to-date, yet major components like Merck, Johnson & Johnson, and Amgen are trading near 52-week highs, indicating potential upside and positioning it as a likely next market leader.
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See More
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- Trading History Analysis: Meuser has sold Nvidia stock annually since 2022, totaling over $1 million in sales over the past four years, despite Nvidia's stock price increasing by over 1,150% in the last five years, suggesting he may have missed significant profit opportunities.
- Potential Violation Risks: The congressman’s disclosures for 2025 show only sales with no reported purchases, raising concerns about potential violations of the STOCK Act and scrutiny over his trading compliance.
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- Local Production Considerations: Super Micro Computer Inc. is weighing options to increase local production in India to meet the expanding AI market, with Managing Director Vik Malyala stating that the company is engaging closely with Indian customers to understand buyer requirements and is adding local staff to support deployments.
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- Supply Chain Pressures: The AI infrastructure buildout is colliding with ongoing supply constraints and allocation concerns in the accelerator market, necessitating AMD to secure long-term memory supply to address the expanding global AI demand.
See More
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- Earnings Potential Analysis: Oppenheimer anticipates Nvidia's Q4 sales could see a typical upside of $2B to $3B, primarily driven by the GB300 Ultra, indicating strong performance in the AI sector.
- Growing Market Demand: Expected capital expenditures from cloud service providers are projected to reach $650B in 2026, up from over $400B in 2025, reflecting sustained demand for Nvidia's products.
- New Product Outlook: The average selling price for Vera Rubin is expected to be 40% to 50% higher than that of GB300, potentially adding around $8B in revenue for Nvidia, further solidifying its market leadership.
- Market Size Expansion: With China now included, Nvidia's total addressable market is estimated to be around $4T, showcasing its dominant position in the global AI platform and future growth potential.
See More
Nvidia's Stock Pullback Presents Investment Opportunities
- Weak Market Performance: Since August 2025, Nvidia's stock has only risen by 5%, significantly lagging behind the S&P 500's 10% gain, indicating market caution regarding its future growth despite optimistic prospects in the AI sector.
- Surge in Capital Expenditures: Amazon, Alphabet, and Meta expect to spend at least $500 billion in capital expenditures in 2026, positioning Nvidia as a primary beneficiary; if it maintains its market share, it could see substantial revenue growth, with global data center capital expenditures projected to reach $3 trillion to $4 trillion by 2030.
- China Market Resumption: Nvidia has regained the ability to export GPUs to China, re-entering the world's second-largest AI market; although the stock has not significantly reacted to this positive development, it provides new momentum for future growth.
- Attractive Valuation: With a forward P/E ratio of less than 24, Nvidia's stock appears cheap compared to the S&P 500's 21.9, suggesting that investors should consider buying during this pullback, especially with upcoming spending increases on the horizon.
See More
Amazon Surpasses Walmart as Top Revenue Company for First Time
- Revenue Comparison: Amazon achieved $716.9 billion in revenue for the latest fiscal year, surpassing Walmart's $713.2 billion for the first time, marking a significant shift in the retail landscape and showcasing Amazon's success in diversifying its revenue streams.
- Digital Advertising Growth: Walmart's digital business grew by 27% in the U.S. in the fourth quarter and has posted double-digit percentage gains for 15 consecutive quarters, indicating strong performance in e-commerce and a focus on higher-margin businesses, despite losing its market leadership.
- AI Strategic Initiatives: Walmart's partnerships with OpenAI and Google to launch the AI shopping assistant Sparky enhance customer experience, with users reporting a 35% higher average order value, highlighting the potential and importance of AI in retail.
- Amazon's AI Investments: Amazon plans to spend up to $200 billion on AI infrastructure in 2023, and despite market skepticism regarding its capital expenditures, its AI assistant Rufus has generated nearly $12 billion in incremental annualized sales, demonstrating its strong commitment to AI development.
See More
Market Rotation and Healthcare Sector Outlook
- Market Milestones: The S&P 500 recently hit the 7,000 mark but failed to close above it, indicating market fragility at high levels, which could affect investor confidence and lead to short-term volatility.
- Sector Leadership Shift: In 2026, sectors like energy, materials, and staples have shown impressive gains of 22.5%, 16.9%, and 13.3%, respectively, but these sectors typically lead near market tops, suggesting current leadership may lack sustainability.
- Healthcare Sector Recovery: The healthcare ETF (XLV) is up only 1.9% year-to-date, yet major components like Merck, Johnson & Johnson, and Amgen are trading near 52-week highs, indicating potential upside and positioning it as a likely next market leader.
- Investment Strategy Adjustment: Investors should focus on the healthcare sector's technical breakout, particularly the crucial $160 level; if cleared, upside targets could reach the mid-180s, signaling increasing investment opportunities in the healthcare sector within the current market environment.
See More
Congressman Sells Nvidia Stock Amid Trading Scrutiny
- Stock Disclosure: Congressman Daniel Meuser (R-Pa.) disclosed his first trades for 2026, selling Nvidia stock worth $1,000 to $15,000 on January 14 and January 30, indicating a cautious approach as he made no new purchases in the previous year.
- Trading History Analysis: Meuser has sold Nvidia stock annually since 2022, totaling over $1 million in sales over the past four years, despite Nvidia's stock price increasing by over 1,150% in the last five years, suggesting he may have missed significant profit opportunities.
- Potential Violation Risks: The congressman’s disclosures for 2025 show only sales with no reported purchases, raising concerns about potential violations of the STOCK Act and scrutiny over his trading compliance.
- Spousal Trading Impact: The latest trades were disclosed as being made by Meuser's spouse, implying he may not have been aware of the Nvidia stock sales, which further raises questions about the transparency of his trading activities.
See More
AMD Shares Rise as India's AI Infrastructure Buildout Accelerates
- Growing AI Demand: India's AI infrastructure buildout is accelerating, with Tata Group and Tata Consultancy Services collaborating on a project to scale up to one gigawatt, which will drive demand for chipmakers, particularly AMD.
- Local Production Considerations: Super Micro Computer Inc. is weighing options to increase local production in India to meet the expanding AI market, with Managing Director Vik Malyala stating that the company is engaging closely with Indian customers to understand buyer requirements and is adding local staff to support deployments.
- Intensifying Competition: As companies like NVIDIA expand partnerships and infrastructure in India, AMD faces an increasingly competitive landscape, where early design wins and ecosystem relationships will significantly influence long-term chip adoption.
- Supply Chain Pressures: The AI infrastructure buildout is colliding with ongoing supply constraints and allocation concerns in the accelerator market, necessitating AMD to secure long-term memory supply to address the expanding global AI demand.
See More
