<div id="readability-page-1">It's been a wild week for semiconductor stocks. And for good reason, as tariffs throw a wrench into global supply chains and capital spending, thereby affecting demand for chips. One of the largest semiconductor exchange-traded funds (ETFs) by net assets is the iShares Semiconductor ETF (SOXX 2.18%). The fund surged 19% on Wednesday, fueled by huge gains in top holdings like Nvidia and Broadcom, as the market skyrocketed in hopes that trade tensions could ease. Here's why the ETF stands out as a solid buy for folks looking for chip companies to invest in artificial intelligence (AI) and growing global connectivity. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTQzNTUvYS1wZXJzb24tc21pbGluZy13aGlsZS1zaXR0aW5nLWF0LWEtdGFibGUtaW4tZnJvbnQtb2YtYS1sYXB0b3AtY29tcHV0ZXIuanBnJnc9NzAw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTQzNTUvYS1wZXJzb24tc21pbGluZy13aGlsZS1zaXR0aW5nLWF0LWEtdGFibGUtaW4tZnJvbnQtb2YtYS1sYXB0b3AtY29tcHV0ZXIuanBnJnc9NzAw"/>Image source: Getty Images. </div> <h2>A roller-coaster week</h2> The iShares Semiconductor ETF is a textbook example of why a fund can hold dozens of stocks but still be highly volatile if it is tied to one theme. As mentioned, the fund surged on Wednesday. Before that, it fell 4% on Tuesday; was up 2% on Monday, fell 7.5% on April 2; and dropped 10% on April 3. When the dust had settled, the fund was down 3% in those five days, showcasing the extent of the sell-off in chip stocks before Wednesday's monster rally. When equity prices are swinging this wildly to the upside and the downside, it can be difficult to stay on an even keel. But maintaining a long-term outlook is the best way to approach the semiconductor industry and the iShares Semiconductor ETF. <h2>Broad-based exposure to the chip industry</h2> The fund gives investors exposure to different aspects of the chip industry. Nvidia is the undisputed leader in making graphics processing units (GPUs) for AI applications. Broadcom makes accelerator chips, or application-specific integrated circuits (ASICs) that are built for AI tasks. The company also has a growing software-as-a-service platform through its acquisition of VMware, as well as an established network connectivity hardware division. The third-largest holding in the fund, Texas Instruments, is an established player in analog and embedded chips mainly used for the industrial and automotive sectors. Qualcomm is the fourth-largest holding in the fund, with a 6.8% weighting. The company is a leader in smartphone chip manufacturing, and its processors power Samsung's generative-AI-enabled Galaxy smartphones. Advanced Micro Devices is the fifth-largest holding. It has an entrenched position in central processing units but is trying to grow its market share in GPUs for data centers that compete with Nvidia. AMD has been relatively unsuccessful so far, a testament to Nvidia's lead over the competition. All told, the top five holdings make up 38% of the fund. With 30 total holdings, it is well diversified across the chip industry. It's a solid way to get exposure to chip designers, manufacturers, components and equipment suppliers, and other parts of the semiconductor industry. <h2>A simple way to invest in AI</h2> Even after Wednesday's surge, the iShares Semiconductor ETF is down 15% year to date (YTD) at the time of this writing. Nvidia is down 15% YTD, and Broadcom is still down slightly over 20%. When markets are volatile, the best way to approach a potential investment is to zoom out and build an investment thesis for why a stock or ETF could be worth holding for at least three to five years. The simplest reason to buy the iShares Semiconductor ETF is for a catchall way to invest in AI. Companies like Nvidia and Broadcom don't mind if Microsoft or Alphabet take market share from Amazon Web Services, as long as data center demand continues to grow. The iShares Semiconductor ETF takes that same idea a step further by owning leaders across the industry so that investors benefit from overall growth even if, for example, AMD eventually takes some market share from Nvidia, or hyperscalers find more value from Broadcom's ASICs for certain applications than Nvidia's GPUs. Before buying the iShares Semiconductor ETF, it's important to recognize that the fund is highly volatile, so it should only be approached if you have a high risk tolerance and long-term time horizon. It's also worth scanning the list of holdings in the fund to see if you would end up with duplicate holdings. For example, suppose you already own Nvidia and are comfortable with your position. In that case, the fund may not be the best buy, considering it would give you even more exposure to Nvidia. With a 0.35% expense ratio, the fund doesn't have as low a fee structure as you'll find from larger, passively managed funds. But the iShares Semiconductor ETF is still a good starting point for investors looking for a plug-and-play way to boost their semiconductor exposure. </div>

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The iShares Semiconductor ETF surged 19% in a single day, driven by gains in Nvidia and Broadcom amid easing trade tensions. Despite recent volatility, the ETF offers broad exposure to the semiconductor industry, including key players like Texas Instruments and Qualcomm. Although down 15% YTD, it remains a solid investment for those looking to capitalize on AI growth. Investors should be aware of its volatility and potential duplicate holdings if they already own stocks like Nvidia. With a 0.35% expense ratio, it serves as a good entry point for semiconductor investments.

- The iShares Semiconductor ETF experienced significant volatility, surging 19% on one day after a series of declines, reflecting the impact of tariffs on global supply chains and chip demand.  
- The fund provides broad exposure to key players in the semiconductor industry, including Nvidia, Broadcom, and Qualcomm, making it a viable option for investors interested in artificial intelligence and connectivity.  
- Despite being down 15% year to date, the ETF is recommended for those with a high risk tolerance and a long-term investment perspective, though potential investors should consider existing holdings to avoid overlap.

Nvidia and Broadcom Helped Propel This ETF 18% Higher in a Single Day. Here's Why It's Still a Buy Now.