KEY POINTS
- The iShares Semiconductor ETF (SOXX) posted a 28.77% April gain, its largest monthly return in 25 years, while the VanEck Semiconductor ETF (SMH) returned 21.91%, its biggest move since November 2003.
- April flows broke records: SOXX pulled in $2.05 billion and SMH took $3.4 billion, against an estimated $230 billion to $280 billion of 2026 AI silicon capex from the four largest hyperscalers.
- Watch Nvidia's May 20 print as the single biggest catalyst for both funds, with SMH carrying 18.9% NVDA weight versus SOXX's broader, lower-concentration exposure.
The iShares Semiconductor ETF (SOXX) returned 28.77% in April, the largest single-month gain in the fund's 25-year history, while the VanEck Semiconductor ETF (SMH) added 21.91% — its biggest monthly move since November 2003. Inflows matched the price action. SMH took in $3.4 billion of net new money in April, an all-time monthly record for the fund. SOXX absorbed $2.05 billion, more than double its previous monthly record, according to Benzinga's flow analysis. The combined $5.45 billion across the two largest US chip ETFs is the most ever in a thirty-day window for the category.
The catalyst was the hyperscaler capex update on April 29. Microsoft, Alphabet, Meta, and Amazon collectively committed to $650 billion to $700 billion of 2026 capital expenditure, with the AI silicon component running at roughly 35% to 40% of the total — call it $230 billion to $280 billion of chip-related buying power across the four customers, which together represent more than 60% of Nvidia's data center revenue. The S&P 500 closed Thursday at 7,209.01, with the broader index up 10.4% for the month, but the chip ETFs left it in the dust by a margin of nearly three to one.
The Architecture Difference Is the Trade
Both funds are semiconductor index trackers, but their construction is meaningfully different and that difference drove the April flow split. SMH tracks the MVIS US Listed Semiconductor 25 Index, a 25-stock basket weighted by modified market cap with individual positions capped at 20%. Nvidia carries an 18.9% weight in SMH. TSMC ADR sits at 12.7%, Broadcom at 8.4%, AMD at 6.1%, and Applied Materials at 4.9%. The top ten holdings represent roughly 73% of the fund.
SOXX tracks the ICE Semiconductor 30 Index, a 30-stock basket with an 8% individual cap. Nvidia carries an 8% weight, Broadcom 7.8%, AMD 7.5%, Texas Instruments 6.2%, Qualcomm 5.4%, Applied Materials 4.8%, and Lam Research 4.5%. The top ten represent roughly 60%. The lower concentration is why SOXX outperformed SMH despite SMH attracting more flows: the second-tier names — Lam, KLA, Marvell, ON Semiconductor — ran harder than the megacaps in April, and SOXX's broader bench captured more of that move.
For active traders, that means SOXX is the chip ETF to use when you want exposure to the broader infrastructure rally — including memory, equipment, networking, and the long tail of AI silicon. SMH is the ETF to use when you want the concentrated megacap trade tied directly to Nvidia and TSMC.
The Nvidia Print Is the Single Catalyst
Both funds are now functionally levered bets on Nvidia's May 20 earnings print, as the iShares fund overview notes. Consensus is calling for $52 billion in revenue and $0.92 in EPS, with data center revenue expected to grow 75% year over year. The whisper number is closer to $54 billion. A clean beat with data center growth above 80% and Blackwell Ultra ramp commentary that confirms second-half capacity expansion would extend the chip ETF rally and likely drive SOXX through $400 per share for the first time. A miss — particularly on China outlook, gross margin, or any softness in the H200 to Blackwell transition — would trigger profit-taking on the strongest one-month move either fund has ever seen.
The risk-reward into the print is asymmetric in a way that is not always obvious. Both ETFs have already pulled forward what would normally be a multi-quarter narrative arc. April's 28% move in SOXX is what the fund typically delivers in a strong full year. That kind of front-loading historically resolves with either a vertical extension on a clean beat or a 10% to 15% drawdown on anything less than perfect.
The Outflow Pair Trade
The flip side of the April flow data is also worth noting. The Direxion Daily Semiconductor Bull 3X Shares (SOXL) — the leveraged long chip vehicle — saw $4.1 billion in net outflows in April. That is not a bearish signal. It is the consequence of the SOXL price tripling, which mechanically forces rebalancing redemptions and tax-aware position trimming. The unleveraged SOXX and SMH inflows are the cleaner signal of structural demand. Allocators are not getting more leveraged into the trade; they are sizing up at the unleveraged exposure level, which is exactly what you want to see if you are a chip bull worried about positioning froth.
The other read-through is to the single-name AI infrastructure plays sitting just outside the chip ETF baskets. Vertiv (VRT), Eaton (ETN), and Astera Labs (ALAB) are not in either SOXX or SMH but track the same capex story, and all three logged double-digit April returns. Investors who want the broader AI infrastructure thesis without semiconductor concentration are increasingly using the iShares US Tech Independence ETF (IETC) and the Invesco Power Grid ETF (GRID) as adjacencies.
What to watch next
May 20 at 4 p.m. ET is the Nvidia earnings print and the single most important data point for both funds. Before that, watch the May 13 CPI release and the Senate AI export control hearing on May 7, where any signal on additional H200 or Blackwell restrictions to China would compress the China-exposed names. The technical setup for SOXX is a weekly close above $390 — that level cleared on Wednesday — needs to hold through the print. Below $370 invalidates the breakout. For SMH, the equivalent levels are $350 (must hold) and $335 (breakout invalidation). For now, the chip ETFs have done the impossible: delivered a 25-year-record month and pulled in record flows, all in the same window.
