VanEck Semiconductor ETF Taps AI Boom with 46.83% Annual Returns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Fool
- Significant Returns: The VanEck Semiconductor ETF has achieved an impressive average annual return of 46.83% over the past three years, significantly outperforming the Nasdaq Composite's 31.12%, indicating strong performance amid the AI boom and attracting yield-seeking investors.
- Diversified Portfolio: With Nvidia as its largest holding at 21% and Taiwan Semiconductor at over 10%, the ETF mitigates risks associated with individual stock volatility by holding a diversified range of large-cap semiconductor firms, enhancing investment security.
- Reasonable Valuation: Although the ETF's holdings have an average price-to-earnings ratio of 41.3, indicating a premium to the market, Nvidia's year-over-year earnings growth of 65% suggests this valuation is justified, providing growth potential for investors.
- Low Management Fees: The ETF boasts a management expense ratio of just 0.35%, below the industry average of 0.56%, meaning that for every $10,000 invested, only $35 goes to management fees, thereby enhancing net returns for investors and increasing its appeal.
Analyst Views on AMD
Wall Street analysts forecast AMD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMD is 281.78 USD with a low forecast of 200.00 USD and a high forecast of 350.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
37 Analyst Rating
27 Buy
10 Hold
0 Sell
Moderate Buy
Current: 214.160
Low
200.00
Averages
281.78
High
350.00
Current: 214.160
Low
200.00
Averages
281.78
High
350.00
About AMD
Advanced Micro Devices, Inc. is a global semiconductor company. The Company is focused on high-performance computing, graphics and visualization technologies. Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes artificial intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), smart network interface Cards (SmartNICs) and Adaptive system-on-Chip (SoC) products for data centers. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, GPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, and others.
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.
