Monty Racusin
SMH ETF delivers stronger performance in Q1 – review top contributors, detractors and updated holdings data.
An overview of SMH’s performance for the first quarter of 2024
Van Eck Semiconductor Corporation Had a strong performance in the first quarter of 2024 vs The previous quarter, an increase of 28.9%. Performance was positive for most of the portfolio, with exposure to NVIDIA Corp. (NVDA) being the largest positive contributor during this quarter. Semiconductors continue to be the primary driver of technological innovation globally, whether complex systems on a chip or memory and core components; We believe this sector represents a long-term trend that investors should consider.
Daily collectibles as of 03/29/24
| name | tape | Wallet weight % | Market value position | Involved |
| Nvidia company | NVDA | 20.55 | 3,780,677,559 | 4,184,202 |
| Taiwan Semiconductor Manufacturing Co., Ltd. ADR | TSM | 11.86 | 2,182,101,052 | 16,038,964 |
| Broadcom Company | Afgo | 7.69 | 1,414,490,806 | 1,067,210 |
| ASML Holdings NV ADR | ASML | 4.88 | 896,926,813 | 924,219 |
| Texas Instruments Corporation | Texan | 4.60 | 846,429,598 | 4,858,674 |
| Qualcomm company | QCom | 4.58 | 842,077,376 | 4,973,877 |
| Intel Corporation | you are K | 4.50 | 828,682,690 | 18,761,211 |
| Lam Research Company | LRCX | 4.49 | 826,317,370 | 850,497 |
| Micron Technology Corporation | Mo | 4.41 | 811,880,019 | 6,886,759 |
| Applied Materials Company | deaden | 4.41 | 811,682,715 | 3,935,813 |
| Advanced Micro Devices Company | AMD | 4.32 | 795,076,679 | 4,405,101 |
| Analog Devices Company | Addy | 3.59 | 659,592,465 | 3,334,812 |
| Kosovo Liberation Army Company | KLAC | 3.45 | 635,282,352 | 909,404 |
| Synopsys Corporation | Snaps | 3.22 | 593,309,012 | 1,038,161 |
| Cadence Design Systems, Inc | CDNS | 2.99 | 549,266,945 | 1,764,543 |
| NXP Semiconductor NV | Nxby | 2.01 | 370,674,822 | 1,496,044 |
| Marvell Technology Company | MRVL | 1.75 | 322,695,022 | 4,552,695 |
| Microchip Technology Company | MHP | 1.69 | 310,287,244 | 3,458,781 |
| Stemicroelectronics NV ADR | STM | 1.25 | 229,676,957 | 5,311,678 |
| Harmonious Energy Systems Company | MPWR | 1.02 | 186,961,146 | 275,990 |
| On the semiconductor company | on | 0.91 | 168,065,648 | 2,285,053 |
| Skyworks Solutions Company | Sox | 0.61 | 112,493,028 | 1,038,525 |
| Teradine Company | Third | 0.54 | 99,354,939 | 880,572 |
| Corfu company | QRVO | 0.39 | 70,962,184 | 617,976 |
| International Display Company | OLED | 0.29 | 53,005,825 | 314,668 |
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Source: Van Eyck. SMH Properties as of 03/29/2024. Collectibles may vary. Please visit vaneck.com/SMH For the fund’s most recent holdings. |
SMH Top Holdings
SMH’s largest shareholders in the first quarter of 2024
NVIDIA Company – Weight 20.54% | 16.35% contribution to the return
In the first quarter of 2024, NVIDIA reported earnings per share (EPS) of $5.98, a significant increase of 629% from the previous year. The company generated record total revenue of $26.0 billion, up 262% year over year and 18% sequentially. This impressive growth was primarily driven by the data center sector, which recorded record revenues of $22.6 billion, an increase of 427% from the previous year. The gaming segment also contributed revenue of $2.6 billion, representing an 18% year-over-year increase despite an 8% decline from the previous quarter.
Additionally, the Professional Visualization and Automotive segments generated revenues of $427 million and $329 million, respectively, with the latter showing notable year-over-year growth of 114%.
Looking ahead, NVIDIA expects revenue of approximately $11 billion for the next quarter, reflecting continued strong performance across its segments. CEO Jensen Huang highlighted the company’s focus on accelerated computing and generative AI as key drivers of future growth, in line with current industry trends.
Taiwan Semiconductor Manufacturing (TSM) – Weight 11.86% | 2.92% return contribution
In the first quarter of 2024, Taiwan Semiconductor Manufacturing Company (TSMC) reported strong financial performance. The company had earnings per share of $1.38, beating analyst estimates of $1.31. TSMC’s revenue for the quarter was $18.87 billion, beating expectations of $18.41 billion. This represents a slight improvement compared to the previous year’s revenue figures, indicating steady growth despite difficult market conditions.
The strong performance was primarily driven by production of advanced technology nodes and growing demand for high-performance computing and automotive applications. TSMC’s strategic investments in expanding its manufacturing capacity and technological advancements have positioned it well to capitalize on the growing demand for semiconductors globally.
TSMC provided upbeat guidance for the coming quarters, anticipating continued growth across its various business segments. The company remains focused on expanding its technology leadership and meeting the diverse needs of its global customer base.
SMH’s top critics in Q1 2024
Intel Corporation (INTC) – Weight 4.50% | -0.80% contribution to the return
In the first quarter of 2024, Intel reported earnings per share of $0.18 on revenue of $12.7 billion, up 9% year over year. However, Intel’s performance fell short of expectations due to a combination of factors, including a gross margin of 45.1%, which was slightly above guidance, and a large loss per share on a GAAP basis of $0.09.
Intel’s weak performance can be attributed to ongoing struggles in its compute and data center businesses, which have faced intense competition and a slower-than-expected recovery in demand. In addition, high capital expenditures for ongoing technological advancements and strategic investments, such as the Intel Foundry initiative, have significantly impacted profitability.
Looking ahead, Intel’s guidance for Q2 2024 includes revenue expectations between $12.5 billion and $13.5 billion, with a non-GAAP EPS estimate of $0.10, reflecting cautious optimism amid challenging market conditions.
ST Microelectronics (STM) – 1.25% wt -0.26% contribution to return
In the first quarter of 2024, STMicroelectronics reported net revenue of $3.47 billion and gross margin of 41.7%, both below expectations. On an annual basis, net revenues decreased by 18.4%, and net income decreased by 50.9% to $513 million. The decline was driven by weak performance in the automotive and industrial sectors despite gains in the personal electronics sector.
For Q2 2024, STMicroelectronics expects revenue of $3.2 billion, a 26% decline year over year. Full-year revenue forecasts were revised to $14-15 billion due to challenging market conditions and prolonged inventory corrections in the industrial sector. Despite these issues, the company is maintaining its $2.5 billion capital plan, focusing on strategic manufacturing initiatives.
Unified performance
| Quarter-end returns as of 3/31/2024 | |||||||||
| 1 year | 5 years | 10 years | Since the beginning | Date created | Expense ratio (%) | ||||
| Van Eck Semiconductor Corporation | Trait | Navigation | 71.94 | 34.64 | 27.21 | 26.27 | 12/20/2011 | Total | 0.35 |
| MKT price | 72 | 34.64 | 27.21 | 26.24 | network | 0.35 | |||
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Source: Van Eyck. VanEck Associates Corporation (“Adviser”) will pay all expenses of the Fund, excluding payment of fees under the Investment Management Agreement, acquired Fund fees and expenses, interest expense, offering costs, trading expenses, taxes, and extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to pay the offering costs until at least February 1, 2025. “Other expenses” have been reworded to reflect the current fees. The performance data quoted represents past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that the investor’s shares, when redeemed, will be worth more or less than their original cost. Performance may be lower or higher than the performance data quoted. Please call 800.826.2333 or visit vaneck.com for current performance as of the most recently completed month. The Fund’s “Net Asset Value” (NAV) is determined at the end of each business day, represents the dollar value of one share of the Fund, and is calculated by taking the Fund’s total assets, subtracting its total liabilities, and dividing it by the total number of shares outstanding. The NAV value is not necessarily the same as the ETF’s daily trading value. Investors should not expect to buy or sell shares at NAV. |
Disclosures
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information provided does not constitute the provision of personal investment, financial, legal or tax advice or any call to action. Certain statements contained herein may constitute projections, projections and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, speak as of the date of this communication, and are subject to change without notice. The actual future performance of any assets or industries mentioned is unknown. Information provided by third party sources is believed to be reliable and has not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information contained herein represents the opinion of the author(s), but not necessarily the opinions of VanEck or its other employees.
An investment in the Fund may be subject to risks including, among others, risks related to investing in the semiconductor industry, securities, and special risk considerations for investing in Taiwanese issuers, foreign securities, emerging market issuers, foreign currency, depositary receipts, companies with capital Mid-money, issuer-specific, market, operating, index tracking, concentration of authorized participants, lack of assurance of an active trading market, trading issues, passive management, trading of fund shares, premium/discount risk and liquidity of fund shares, and other diversified and index-related concentration risks, All of which may negatively affect the Fund. Issuers of emerging market and foreign securities may be subject to securities market, political and economic restrictions, investment and repatriation restrictions, different rules and regulations, less publicly available financial information, foreign currency and exchange rates, operational and settlement risks, and corporate and securities laws risks. Medium-capitalization companies may be exposed to high risks.
Investing involves significant risks and high volatility, including possible loss of capital. An investor should carefully consider the investment objective, risks, costs and expenses of the Fund before investing. To get a Prospectus and prospectus summaryWhich contains this and other information, contact 800.826.2333 Or visit vaneck.com/etfs. Please read Prospectus and prospectus summary Carefully before investing.
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Editor’s note: The summary points for this article were selected by Seeking Alpha editors.
