If you look at earning report details from AVGO, MU, and ASML, they all pointed out two things
1: AI demand is super strong
2: Traditional semi industry, especially in auto, industry, and to smaller degree, cell phone market, is still in over-supply situation
The semi index fund has lots of semi companies with heavy "traditional" business. For example, in SMH, you have AMAT, TXN. Also QCOM main business in smart phone chips, and until we have true evidence that cell phone upgrade cycle is in (iPhone 16 story still need to be confirmed), QCOM stock will remain range traded
If you invest in index, you are not investing in AI only, but the entire semi, and performce will be dragged down by those laggard.
This is why I would rather focus on the true enabler such as NVDA, TSM --- even AVGO is not a true yardstick. But AVGO bought VMware so they get benefit of cloud and AI software play from that acquisation, plus Tan is an awesome leader so I have it in my portfolio.
