Investors poured money into semiconductor ETFs this week as a rally in chip stocks gathered momentum, driven largely by strong earnings from major technology companies. Three exchange-traded funds tracking the sector captured the most new cash, signaling confidence in the broader market despite climbing Treasury yields.
Microsoft Corp. (MSFT) jumped 16% Thursday after posting stronger-than-expected growth in its Azure cloud business. Amazon.com, Inc. (AMZN) surged 11% Friday on a second-quarter revenue beat tied to its own cloud strength. Both companies reported heavy spending on artificial intelligence infrastructure, fueling the gains.
The rally pushed the iShares Semiconductor ETF (SOXX) up 5.4% on Friday, extending an 8.5% jump from the previous day. That 8.5% move was the fund’s best performance since April 9, 2025. Micron Technology, Inc. (MU) and Advanced Micro Devices, Inc. (AMD) led the advance.
SOXX led the group with about $4.08 billion in new cash this week. The fund holds $41.6 billion in assets and charges a 0.34% expense ratio, VettaFi data show. Since launching in July 2001, the fund has tracked a modified market-cap-weighted index of 30 U.S.-listed chip companies.
That modified cap-weighting keeps any single stock from dominating the portfolio. AMD is SOXX’s largest holding at 8.6%, followed by Nvidia Corp. (NVDA) at 8.4%, Micron at 8.2% and Broadcom Inc. (AVGO) at 7.9%. Together, the top 10 holdings make up about 61% of assets.
SMH added about $3.3 billion in new cash this week. The fund holds $63.3 billion in assets and charges a 0.35% expense ratio, VettaFi data show. Since launching in May 2000, it has tracked a narrower, market-cap-weighted index of just 25 stocks.
That structure hands outsized influence to the industry’s biggest names. Nvidia alone accounts for 20.8% of SMH’s portfolio, followed by Taiwan Semiconductor Manufacturing Co. (TSM) at 9.6%, Broadcom at 6.6% and AMD at 5.7%. Together, the top 10 holdings represent about 72% of assets, well above SOXX’s level.
SOXL drew about $2.4 billion in new cash this week, the smallest haul of the three. The $15.4 billion fund launched in March 2010 and charges a 0.75% expense ratio. It uses swaps and futures to chase 300% of SOXX’s daily index move, according to VettaFi. AMD and Nvidia remain the fund’s largest direct holdings, though, at 4.9% and 4.8%.
That leverage cuts both ways. SOXL has fallen 15.5% so far in 2026, compared with declines of roughly 4% for SOXX and SMH. The fund leans on swaps and futures rather than holding stocks outright. That structure means daily compounding can push returns well away from three times the index over time, better suited to short-term trades than long-term holding.
Microsoft’s performance on Azure is a significant factor in the rally, as cloud spending remains a primary driver for chip demand. Meanwhile, broader market trends are influencing investor sentiment alongside the semiconductor sector’s strength.
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