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This Week's Bonus Content Find the Next NVIDIA With This Semiconductor ETFAuthored by Jordan Chussler. Article Posted: 1/2/2026. 
Summary - Last year, NVIDIA outperformed the market, but other semiconductor stocks posted better gains.
- The SPDR S&P Semiconductor ETF holds a basket of semiconductor stocks that can provide investors with broad industry exposure.
- In 2025, the fund returned more than 29%—better than the tech sector and the broad S&P 500.
The AI trade proved its worth again last year: tech stocks gained more than 22%, allowing the sector to outperform the broad S&P 500 for the 11th time in 12 years. When it comes to pure-play AI stocks, NVIDIA (NASDAQ: NVDA) receives the lion's share of attention. The Magnificent Seven mainstay and the largest publicly traded company by market cap gained nearly 36% in 2025 and is up 1,336% over the past five years. Wall Street Legend Who Called 2022 Bear Issues New Warning
50-year Wall Street legend Marc Chaikin called the 2022 bear market, the 2023 bank failures, the 2020 crash, and the 2025 tariff tantrum – all in advance. In light of the recent volatility, he's now stepping forward to warn of a "violent market shift" headed straight for U.S. stocks in early 2026. Here's how to prepare. However, despite its accolades, NVIDIA actually played second fiddle to another AI-leveraged semiconductor company last year: Micron Technology (NASDAQ: MU), which arguably won 2025's AI race with an impressive gain of more than 235%. For investors hunting the next big semiconductor stock, the best approach is likely not relying on a single company. Instead, a thematic ETF that provides broad industry exposure may be a better way to identify up-and-coming semiconductor winners. The U.S. Semiconductor Market Is Rapidly Expanding Industry consultancy Grand View Research estimates the U.S. semiconductor market at $9.17 billion in 2024 and forecasts a compound annual growth rate (CAGR) of 7.3% from 2025 through 2030. Grand View's report notes that much of that growth will be driven by rising demand for applications in wired and wireless communications, consumer electronics, industrial electronics, automotive electronics, computing, and data storage, among others. Specific to the United States, the report finds that the "semiconductor devices industry is witnessing a surge in the adoption of artificial intelligence (AI) and Internet-of-Things (IoT)-driven chip designs." Those findings are underscored by a McKinsey report published in November 2025, which projects that by 2030 the global semiconductor market could be worth as much as $1 trillion, with the United States accounting "for 30% of advanced-node semiconductor fabrication capacity." However, amid a landscape full of startups trying to take market share from dominant players like NVIDIA and Micron, picking the next winning semiconductor stock can feel like taking a shot in the dark. For ETF investors, a fund's holdings can indicate which companies are most likely to come out on top. A One-Stop-Shop Thematic Semiconductor ETF The SPDR S&P Semiconductor ETF (NYSEARCA: XSD) provides broad exposure to the industry. Managed by State Street, the fund "allows investors to take strategic or tactical positions at a more targeted level than traditional sector-based investing." The XSD has $1.61 billion in assets under management and a net expense ratio of 0.35%. Its dividend currently yields 0.25% (about $0.82 per share annually), which nearly offsets the fund's fee. What may surprise some investors is that while NVIDIA is included among the XSD's holdings, it ranks just 19th by weight. That's because the passively managed fund seeks to track the S&P Semiconductor Select Industry Index. The benchmark is a modified equal-weight index: although it begins equally weighted, it can cap allocations of the largest stocks to ensure smaller companies receive meaningful exposure. Currently, the ETF's top five holdings include Micron, Rigetti Computing (NASDAQ: RGTI), Intel (NASDAQ: INTC), SiTime (NASDAQ: SITM), and MACOM Technology Solutions (NASDAQ: MTSI). Advanced Micro Devices (NASDAQ: AMD), which gained nearly 79% last year, holds the sixth-largest allocation. The XSD's Strong Performance Is Likely to Continue In 2025, the ETF gained more than 29%—outperforming the tech sector (22.3%) and the broad S&P 500 (17.51%). Given the semiconductor industry's multiple tailwinds heading into 2026, it isn't surprising that Wall Street expects another strong year. Based on 675 analyst ratings covering the fund's top 25 companies—more than 75% of its portfolio—the ETF earns a Moderate Buy rating. Most holdings are rated Moderate Buy, Buy, or Strong Buy; only one company has a Sell rating. Underscoring investor confidence in the XSD, current short interest heading into 2026 stands at just 2.22% of the float (about $34 million), sharply down from $4.97 billion of shares shorted on June 30.
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