The VanEck Semiconductor ETF (SMH) reached a new all-time high on Monday, extending its record-breaking run as investors returned to AI-linked chip stocks following last week's pullback. The ETF traded at $646.27 by midday, up 4.2% on the day, after hitting an intraday high of $648.02. This follows a close of $619.96 on June 12, which capped an 8.8% weekly gain.
The rally was broad-based, with key holdings such as Lam Research (LRCX), Marvell Technology (MRVL), Arm Holdings (ARM), ASML Holding (ASML), and Kulicke & Soffa (KLIC) all advancing. Lam Research jumped 6.1% to $389.26, Marvell rose 7.6% to $300.91, Arm gained 5.0% to $400, ASML climbed 1.9% to $1,898.05, and Kulicke & Soffa moved up 1.0% to $114.28. The Philadelphia Semiconductor Index also hit a fresh high, rising 4.5%.
Market strength was underpinned by a broader risk-on sentiment, with Wall Street's major indexes rising on reports of a tentative U.S.-Iran deal to end the Middle East conflict and reopen the Strait of Hormuz, sending crude oil prices lower. Nvidia (NVDA) gained 3%, while Micron Technology (MU) surged 9.2%.
The renewed buying in AI infrastructure names comes after a brief dip last week, driven by strong demand for AI-related chips and recent upbeat earnings reports. Lam Research reported record revenue of $5.84 billion and non-GAAP diluted EPS of $1.47 for the March quarter, with CEO Tim Archer citing "AI-driven demand reshaping the semiconductor industry." Marvell posted fiscal first-quarter revenue of $2.418 billion, with data center business accounting for 76% of that. CEO Matt Murphy highlighted "exceptional AI-related bookings" and raised the company's outlook for fiscal 2027 and 2028.
SMH has been on a tear in 2026, with year-to-date returns of 72.02% as of June 12, according to VanEck. The ETF's net assets stood at $71.92 billion, tracking the MVIS US Listed Semiconductor 25 Index, which covers semiconductor and chip equipment companies. The fund moved from $360 at the start of the year to $638 by June 3, according to 24/7 Wall St., before hitting the latest high.
Despite the impressive rally, expectations remain high. Investors continue to buy AI stocks, but questions linger about whether chipmakers and their big cloud customers can sustain the level of demand needed to justify such valuations. The market will be watching upcoming earnings and guidance for signs of continued strength in AI spending.
