Forget Betting Everything on NVIDIA. This Chip Fund Rode the Same AI Boom and Is Up 79% in 2026

The post Forget Betting Everything on NVIDIA. This Chip Fund Rode the Same AI Boom and Is Up 79% in 2026 appeared first on 24/7 Wall St..

Holding only NVIDIA (NASDAQ:NVDA) has been the easiest trade in markets for the better part of three years. The case is hard to argue with: a $5.06 trillion market cap built on a near monopoly in AI accelerators, 85.23% revenue growth last quarter, and a CEO calling the AI buildout “the largest infrastructure expansion in human history.” But NVIDIA the stock and NVIDIA the AI trade are no longer the same thing. In 2026, the rest of the chip stack has caught up, and one semiconductor ETF has outperformed NVIDIA on a total return basis.

What Nvidia Holders Actually Own Right Now

NVIDIA is up 11.35% year-to-date through June 16, 2026, which is respectable in isolation, but it is also the smallest part of a much larger story. Data Center revenue grew 92% year over year to $75.246 billion, and networking revenue climbed 199%. The business is growing across every segment. The stock, priced for that perfection, is not keeping pace with the broader semiconductor complex it created demand for.

There is also a concentrated risk that NVIDIA holders carry that does not show up in the headline numbers. NVIDIA reported zero H20 shipments to China in the quarter, down from $4.6 billion a year earlier, and China data center compute is excluded entirely from the Q2 outlook. One regulatory headline can move 10% of the position. Holding only Nvidia concentrates exposure to a single export-license regime.

The Same AI Boom, Spread Across the Stack

The VanEck Semiconductor ETF (NASDAQ:SMH) is up 79.69% year to date, more than five times Nvidia’s return over the same window. The fund tracks the 25 largest U.S.-listed semiconductor names and charges a 0.35% expense ratio. It is a pure chip fund, 100% semiconductors, and that focus is the whole point.

The reason the fund is outperforming NVIDIA is immediately apparent in the weightings. NVIDIA still leads the roster at 14.17%, but the next tier is where the acceleration comes from. Taiwan Semiconductor sits at 9.15% and remains the foundry behind nearly every advanced AI chip. Micron follows at 8.06% after a surge in demand for high-bandwidth memory. AMD is close behind at 7.46% as hyperscalers ramp custom silicon programs. Intel at 7.44% has benefited from a rebound in PC volumes and early traction in its foundry push. Broadcom, at 5.87%, continues to post strong growth in AI networking and custom ASICs.

NVIDIA may be the largest position, but an investor in this portfolio picks up the full stack: the foundry layer, the memory suppliers, the equipment makers, and the alternative compute paths that benefit when hyperscaler capex flows through the entire supply chain rather than concentrating in a single vendor. That breadth is the core appeal of semiconductor ecosystems and AI hardware diversification.

The Real Tradeoffs

SMH is concentrated in the chip sector rather than broadly diversified. The top five holdings account for a large percentage of the fund, while a semiconductor cycle turn hits this ETF the way it hits individual chip stocks. The 2022 selloff is the cleanest precedent.

The fee also matters relative to alternatives. At 0.35%, SMH costs more than a broad tech index. The premium pays for pure chip exposure, which is the entire reason an Nvidia holder would consider it. Tax treatment is the other constraint: selling appreciated Nvidia in a taxable account triggers capital gains. A holder considering a partial swap should compare the tax bill against the diversification benefit before acting.

The Practical Path

The swap that fits most NVIDIA holders is a partial reallocation. Trimming a portion of an outsized NVIDIA position and rotating into SMH keeps the AI thesis intact, reduces single-stock and single-country risk, and adds exposure to the parts of the boom Nvidia does not capture directly, including memory pricing, custom ASICs, and foundry capacity. In a tax-advantaged account, the move is mechanical. In a taxable account, the cost-benefit math is worth running first.

NVIDIA remains a working thesis, just a crowded one. SMH offers a way to stay in the AI trade with less dependence on a single ticker, a single customer base, and a single regulatory regime. Whether that tradeoff is worth making depends on how much of a portfolio is already riding on one stock.

The post Forget Betting Everything on NVIDIA. This Chip Fund Rode the Same AI Boom and Is Up 79% in 2026 appeared first on 24/7 Wall St..