This Unstoppable ETF Has Turned $5,000 Into More Than $21,000 in 5 Years. Is It a Buy Right Now?
Key Points
Semiconductors are an important piece of much of the technology hardware we rely on today.
Micron and AMD account for over 21% of the iShares Semiconductor ETF.
The demand for semiconductors should increase as companies continue to build data centers.
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I consider semiconductors the unsung heroes of the tech world. They're crucial parts of the technology we use every day, but the average person has no idea what they are or what they do. You can think of semiconductors as the brains of many electronics.
Semiconductor companies have always been important, but with the current AI boom, they've had much more attention. And with this increased attention has come a rise in the popularity of semiconductor stocks. However, instead of trying to pick individual winners, many people have decided to lean on semiconductor ETFs.
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The iShares Semiconductor ETF (NASDAQ: SOXX) has been a go-to for many investors, and many of them have been rewarded handsomely. In the past five years, SOXX is up 321% (as of market close on June 3), meaning a $5,000 investment then would be worth around $21,070 now. Given this impressive performance, is SOXX an automatic buy right now?
Image source: Getty Images.
SOXX's top holdings have a lot of influence
Semiconductor stocks have been rising overall, but much of SOXX's success has come from its top holdings, given its top-heavy composition. Below are its top 10 holdings:
| Company | Percentage of the ETF |
|---|---|
| 1. Micron Technology | 12.33% |
| 2. Advanced Micro Devices (AMD) | 9.33% |
| 3. Broadcom | 7.07% |
| 4. Marvell Technology | 6.59% |
| 5. Nvidia | 6.22% |
| 6. Intel | 5.88% |
| 7. Applied Materials | 4.50% |
| 8. Qualcomm | 3.95% |
| 9. Texas Instruments | 3.39% |
| 10. NXP Semiconductors | 3.37% |
Data source: Invesco. Percentages as of June 1, 2026.
The ETF holds 30 stocks, but the top two stocks account for over 21% and the top 10 for more than 62%, so their influence is significant. Just this year, Micron and AMD are up over 254% and 145% year to date (as of June 2), respectively.
Considering the impressive performance of its top holdings, SOXX's overall success checks out. It's up nearly 99% year to date, leading all major indexes by a long shot.
Should investors expect the momentum to continue?
Semiconductors will remain key to technology, and semiconductor companies will remain important parts of the tech ecosystem. However, that doesn't necessarily mean the industry (and SOXX) will experience the same type of growth it has over the past few years.
Past results don't guarantee future performance, and dynamics change, but one thing working in semiconductor companies' favor is the demand for them as companies build out data centers and other AI infrastructure that relies on semiconductors. I trust that SOXX will make a good long-term option, even if it isn't a 4-bagger over the next five years.
SOXX isn't a get-rich-quick option; it's more about banking on the growing importance of semiconductors. I wouldn't make it a large part of my portfolio, but it can definitely serve a productive role as a complementary piece.
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Applied Materials, Broadcom, Intel, Marvell Technology, Micron Technology, NXP Semiconductors, Nvidia, Qualcomm, Texas Instruments, and iShares Trust-iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
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