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Semiconductor ETF (SMH) Hits New 52-Week High
VanEck Semiconductor ETF (SMH - Free Report) is probably on the radar for investors seeking momentum. The fund just hit a 52-week high and moved up 84.3% from its 52-week low price of $136.10/share.
Are more gains in store for this ETF? Let us take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed.
SMH in Focus
The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment. The product charges 35 bps in annual fees.
Why the Move?
On Tuesday, chipmaker NVIDIA (NVDA - Free Report) stock surged above $1,100 for the first time, reaching a new milestone. Elon Musk's artificial intelligence startup, xAI, announced on Sunday that it had successfully raised $6 billion in a Series B funding round.
Reports suggest that Elon Musk intends to deploy Nvidia chips for a new "supercomputer" aimed at powering xAI's chatbot named Grok. This news sent Nvidia stock and NVIDIA-heavy semiconductor ETFs like SHOC, SMH and SOXQ soaring.
More Gains Ahead?
Currently, SMH has a Zacks ETF Rank #1 (Strong Buy). However, it might continue its strong performance in the near term, with a positive weighted alpha of 81.34, which gives cues of a further rally.