The VanEck Semiconductor ETF (SMH) dropped nearly 10% due to a rotation of capital from AI and tech stocks into sectors like Financials and Energy amid worsening liquidity and macroeconomic challenges. The portfolio manager reduced cash holdings from 18% to 13%, selectively adding to AI-related stocks while taking profits in software. Recovery of the AI trade depends on factors like lower oil prices, a weaker dollar, confirmation of hyperscaler capital expenditures, neocloud stability, and a successful Anthropic IPO. Current volatility is seen as a buying opportunity rather than a breakdown in the investment thesis.
Following the recent selloff in AI and tech stocks described in the news, the VanEck Semiconductor ETF (SMH) has rebounded on Pluang, trading at USD 552.31 with a 1-day gain of 2.32% as of Oct 19, 2026 13:02 WIB. This recovery contrasts with the earlier drop and highlights ongoing investor interest despite volatility. The ETF's market cap stands at $65.68 billion, and it remains well below its 52-week high of $668.91, indicating room for potential growth.
