Why The iShares Semiconductor ETF Soared 112.8% In The First Half of 2026
Key Points
Growth in AI demand is supercharging the semiconductor sector.
Memory chip shortages have led to huge stock gains in the past few quarters.
The sector looks risky to invest in at the moment.
Shares of the iShares Semiconductor ETF (NASDAQ: SOXX) were up 112.8% in the first half of 2026, according to data from S&P Global Market Intelligence. Investors are betting big on the sector as a "picks and shovels" play for the artificial intelligence (AI) infrastructure cycle, which is now getting supercharged by the recent surge in memory chip stocks.
The semiconductor ETF is up 112.8% this year and almost 300% in the last five years alone, making it one of the best corners of the market to bet on in recent years. Here's why the party continued in 2026, and whether the ETF looks like a buy today.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Betting on memory chip shortages
The early days of the AI revolution were driven by the growth of Nvidia, which is now the largest company in the world by market cap and still a large constituent in the iShares Semiconductor ETF. However, in 2026, the gains were driven by other leading semiconductor companies, such as Micron Technology and Intel, which are among the ETF's largest holdings.
Micron is soaring because of the memory chip shortage, which is driving up prices across the industry, making it a large beneficiary. Profits have mooned for the company, and the stock is up 314% year-to-date (YTD) as of this writing on July 10th, 2026. Intel could benefit from increased demand for CPUs to run AI software, as well as from its role as a national champion in the United States.
Overall, it is hard to find a stock within the iShares Semiconductor ETF that is not benefiting greatly from AI, which is why it has jumped triple digits in just half a year.
Image source: Getty Images.
Should you buy the Semiconductor ETF?
If you look at a list of the largest market caps in the world, around half of the top 25 are now semiconductor-related. The world runs on semiconductors, whether in AI, smartphones, or basic computers and appliances. Even electric vehicles contain many computer chips.
This does not make the ETF an automatic buy after it soared by more than 100% this year. Semiconductors are historically quite cyclical, meaning when this bull market eventually ends, there could be a lot of pain on the other side. Micron, on its own, has experienced many severe drawdowns over its multi-decade history.
After rising over 112.8% in the first half of 2026, it is probably best for investors to avoid piling into the semiconductor sector for the rest of the year.
Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel, Micron Technology, Nvidia, and iShares Trust-iShares Semiconductor ETF. The Motley Fool has a disclosure policy.