AI Uncertainty Is Rising, But These 3 Chip ETFs Still Have Momentum

Key Points

• Despite concerns about slowing AI development, semiconductor demand may remain resilient, making diversified ETFs an appealing way to gain exposure while managing risk.
• The iShares Semiconductor ETF and Invesco PHLX Semiconductor ETF both offer broad, passively managed exposure to major chipmakers, with SOXX up over 80% and SOXQ up 78% year to date.
• The actively managed Roundhill Memory ETF has grown rapidly amid a memory shortage, delivering 121% returns since its April 2026 launch.

It's easy to get skittish about the tech sector amid recent talk of slowing AI development and OpenAI scrapping the launch of its latest model due to safety concerns. AI demand has driven much of the sector's growth in recent years, after all. Still, talk of an AI slowdown doesn't necessarily mean that semiconductor demand overall will also decline—some parts of the industry are more exposed to AI infrastructure spending than others.

Further, AI-related capital spending on hardware may remain elevated even if technological growth moderates. In this environment, those semiconductor makers with multiple growth drivers could stand out, alongside critical networking and connectivity firms, major foundries, and others.

One of the more appealing ways to remain exposed to the semiconductor industry amid this volatility while also trying to moderate risk is through a diversified exchange-traded fund (ETF), like one of those below, each offering a somewhat different way to play this corner of the market.

Tried-and-True Exposure to Some of the Largest Chipmakers

One of the cornerstones of the semiconductor ETF space, the $48-billion iShares Semiconductor ETF NASDAQ: SOXX appeals for its exposure to the general semiconductor manufacturing industry.

Most of the fund is allocated to mid- and large-cap stocks, giving it some exposure beyond the biggest names (and potentially increasing volatility as a result).

The growth potential of some of these smaller firms may draw investors with a strong conviction that the industry is not yet fully developed.

Still, SOXX has a narrow portfolio of just 34 total companies, with major producers like Intel Corp. NASDAQ: INTC and Advanced Micro Devices Inc. NASDAQ: AMD taking up more than 9% of assets each.

This concentration at the top prioritizes the largest chipmakers, which works well when the overall industry is experiencing strong demand but may limit growth potential.

That being said, SOXX is still up more than 80% year to date (YTD), an appealing return for a fund with an annual fee of 0.33%. This may be a reason the fund is so immensely popular.

Fast-Growing Memory Hardware Fund With Stellar Returns

A shortage in memory has meant record-breaking growth for the Roundhill Memory ETF BATS: DRAM, which has ballooned up to $27 billion in managed assets and maintains a similarly robust trading volume too.

A benefit of this fund is its easy access to many of the largest chipmakers around the world—its 19 holdings include major firms from Korea, Taiwan, and other regional hubs for the industry.

DRAM has only traded since April 2026, so it is among the newer tech hardware funds, but its rapid ascent in popularity has accompanied returns of 121% since launch. Investors may be drawn to the fund's active management style, which allows it to quickly adapt its portfolio to changing market conditions.

The fact that it provides international exposure in a single trade is another perk. Still, the fund is largely untested in more challenging market environments for the time being.

An Alternative to SOXX With Heavier Concentrations, Lower Fees

The Invesco PHLX Semiconductor ETF NASDAQ: SOXQ is very similar to SOXX above in some ways—both have significant exposure to the largest names in the semiconductor industry and follow a passive management approach.

Where SOXQ distinguishes itself is in terms of portfolio weighting and cost. SOXX may be slightly more balanced, while SOXQ tends to weight its very largest positions somewhat more aggressively. NVIDIA Corp. NASDAQ: NVDA, for example, makes up more than 11% of the basket, a higher allocation than any single stock in SOXX's portfolio. Still, the fund remains similarly diversified in terms of total number of positions.

SOXQ also comes in significantly cheaper than SOXX, with an expense ratio of just 0.19%. Nonetheless, SOXX tends to have better liquidity, so this may even out for more active traders, with SOXQ appealing to those more interested in buying and holding a chipmaker fund.

Overall, these two funds are very similar and have significant portfolio overlap. Still, there are subtle but important distinctions between them that may cause them to appeal to different investors—SOXX may draw those believing AI enthusiasm is too heavily concentrated in a handful of mega-cap names, for example, while SOXQ may be preferable for hands-off investors content to continue to focus on those biggest companies. SOXQ's YTD returns of 78% are slightly below SOXX's over the same period, but both funds have drastically outperformed the broader market this year.