Semiconductor Leaders SOXX, SMH, and FTXL Are Crushing It on AI Infrastructure Demand

The semiconductor sector continues to absorb capital at a pace tied to the AI infrastructure buildout, and three exchange-traded funds offer distinct angles on it: iShares Semiconductor ETF (NASDAQ:SOXX | SOXX Price Prediction), VanEck Semiconductor ETF (NASDAQ:SMH), and First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL). Each holds Advanced Micro Devices (NASDAQ:AMD), whose Q1 earnings report, released today, reinforces what the funds are trying to capture.

AI infrastructure has turned the old “picks and shovels” idea into something far more muscular. Every layer of the stack pulls in silicon: accelerators, CPUs, networking chips, memory, and the equipment that makes it all possible. The portfolios reflect that reality, with NVIDIA, TSMC, Broadcom, and AMD carrying most of the load.

Performance has kept pace with the demand story. SOXX is up about 60% year to date, SMH has climbed roughly 45%, and FTXL has surged close to 74%. The numbers show how powerful the hardware cycle has become as AI spending continues to widen.

Why the AMD earnings report matters for the thesis

AMD’s quarter landed with the kind of momentum that keeps the semiconductor cycle moving. Q1 2026 revenue came in at $10.25 billion, up 38% from last year, and the Data Center segment delivered $5.78 billion, a 57% jump. Non‑GAAP EPS reached $1.37, clearing the $1.29 consensus without much drama.

Management then pointed to roughly $11.20 billion in Q2 revenue, representing about 46% year‑over‑year growth. Taken together, the print, the segment mix, and the guide all reinforce the same message: demand is widening across the supply chain, not narrowing to a handful of winners.

CEO Lisa Su described the quarter as “driven by accelerating demand for AI infrastructure, with Data Center now the primary driver of our revenue and earnings growth”. The Data Center growth curve has steepened from 14% YoY in Q2 2025 to 57% YoY in Q1 2026. Trailing P/E sits near 134, with a forward multiple closer to 54. AMD trades on forward growth expectations, and the customer roster behind that growth includes Meta, AWS, Google Cloud, Microsoft Azure, OpenAI, and Tencent.

SOXX: balanced U.S. exposure with concentration caps

SOXX tracks the NYSE Semiconductor Index, holding roughly 30 U.S.-listed semiconductor names under a modified market-cap-weighting scheme that caps single-stock exposure. The mechanism connecting it to the supercycle is breadth. Investors get designers like NVIDIA, Broadcom, and AMD; equipment makers like Applied Materials, Lam Research, and KLA; and integrated device manufacturers, all without one position dominating the fund.

That structure matters because the AI cycle touches equipment vendors as much as it does chip designers. Foundry capacity expansions force orders for lithography, deposition, and metrology tools, and SOXX captures that supply chain exposure inside a single ticker. Sponsored by BlackRock, the fund carries a net expense ratio of 0.34%, ranks among the more liquid semi-ETFs, and has returned 158% over the past year and 262% over five years.

The tradeoff is the cap itself. When NVIDIA leads the group higher, SOXX participates less than a market-cap-weighted peer. Investors comfortable with that constraint get a fund less exposed to a single-name drawdown.

SMH: maximum torque to the AI leaders

SMH from VanEck tracks the MVIS US Listed Semiconductor 25 Index. The portfolio is roughly 25 names with high single-stock caps, producing heavy weight to NVIDIA and TSMC. SMH is the largest semiconductor ETF by assets and has the most direct leverage to the leaders driving AI capex.

Two structural choices set SMH apart. First, the holding count is concentrated, which means the top three or four positions move the fund. Second, SMH includes foreign-domiciled names through ADRs, particularly TSMC and ASML. Investors get exposure to the foundry that fabricates almost every advanced AI chip and the lithography monopoly that supplies its tools. SOXX, by index rule, holds only U.S.-listed primary issues.

The fund is up 141% over the past year and 349% over five years, outpacing the SOXX over longer windows due to NVIDIA’s weighting. The tradeoff is symmetric: when NVIDIA or TSMC corrects, SMH falls harder. Investors who believe the leaders will keep leading take this fund. Investors who want the cycle without single-name risk choose SOXX.

FTXL: the smart-beta pick most investors overlook

FTXL tracks the Nasdaq US Smart Semiconductor Index, weighting holdings on volatility, value, and growth factors rather than pure market capitalization. The mechanism is intentional underweighting of the mega-caps and a corresponding tilt toward mid-caps and second-tier names. The fund is the smallest of the three by assets and the least liquid.

The factor methodology produces a portfolio that captures the broader supply chain rather than concentrating on NVIDIA. For investors who think the largest names trade at stretched valuations and that the next leg of the cycle will lift secondary beneficiaries, FTXL is the cleaner way to express that view inside a passive wrapper.

The data support the contrarian framing. FTXL is the best performer of the three year-to-date at 74% and is up 198% over the past year, ahead of both peers. Liquidity is the real cost. Bid-ask spreads run wider, and assets under management trail SOXX and SMH by a wide margin, which can affect execution on larger orders.

Picking between them

The three funds fall into place once you think about the type of investor behind each choice.

1. SOXX anchors the long‑term core. Investors who want broad semiconductor exposure as a durable sector allocation land here, since the concentration caps keep any single name from dominating the portfolio. The mix of designers, IDMs, and equipment makers gives the cleanest read on the full cycle.
2. SMH speaks to the investor who wants to lean into the AI leaders. Anyone convinced that NVIDIA and TSMC remain the essential suppliers and is comfortable with the volatility that comes with that conviction lines up with SMH. The presence of ASML and TSMC adds a layer of exposure that SOXX cannot offer structurally.
3. FTXL plays a different role entirely. Investors who already hold the mega‑caps directly, or who believe the next leg of gains comes from mid‑cap semis, gravitate toward FTXL. Its factor‑weighted design pulls more of the cycle’s broadening into the second tier of the supply chain.

AMD’s results are only one data point, yet the segment trajectory, the customer list, and the guide all point to a widening cycle across the supply chain. Each fund captures that story in its own way, and the right pick depends on how tightly an investor wants to cluster around the names already carrying the heaviest load.