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Chip stocks have driven unusually large gains for several tech-focused exchange-traded funds as investors have leaned into AI “picks-and-shovels” plays tied to semiconductor and memory demand.
Soaring memory and chip-related stocks have propelled some of the biggest year-to-date moves among tech ETFs. The chip rally has also made many funds more concentrated in the AI data center theme, reducing diversification benefits.
Among the standout performers is the Roundhill Memory ETF (DRAM), launched in April. The fund leads the group with a 99% return as of Monday. DRAM is designed to track a memory-focused basket of global chip companies benefiting from what Roundhill describes as the multi-decade buildout of AI infrastructure. For comparison, the S&P 500 is up less than 10% this year.
As tech ETFs become more concentrated in volatile memory and semiconductor stocks, they become more exposed to sharp swings in the share prices of their largest holdings. Higher concentration can amplify gains on up days, but it can also deepen declines when those stocks fall.
The broader semiconductor ETF complex is also outperforming. The Invesco Semiconductors ETF (PSI) is up about 75% this year. PSI tracks a proprietary index of 30 semiconductor stocks, which is more diversified than some peers, but recent gains in individual names have increased concentration risk. Shares of MaxLinear (MXL), a chip designer with a fast-growing data center business, are up more than 300% in the past month, and the company accounts for 10% of PSI—more than twice the weight of Nvidia (NVDA), which is listed at a $5 trillion market value. The article notes that weights may be adjusted during the index’s quarterly rebalancing at the end of the month.
DRAM’s performance is closely tied to its concentration. The ETF holds nine stocks, and its top three holdings—Micron (MU), SK Hynix, and Samsung—account for nearly three-quarters of the fund.
Smaller components have also surged. SanDisk (SNDK), at about 6% of the fund, is up more than 400% in 2026.
“Investors are waking up to the fact that the biggest bottleneck in the AI buildout is actually memory chips,” Roundhill CEO Dave Mazza said on CNBC Tuesday. “There’s actually an incredible amount of supply-and-demand imbalance with memory, which is one of the reasons the stocks have been performing so well.”
Other chip-focused ETFs have been boosted by Intel, described as the S&P 500’s best-performing stock over the past month. Intel closed last month at its first record high since 2000 after the company exceeded earnings expectations due to “unprecedented demand” from the AI boom.
Intel is the top holding in the First Trust Nasdaq Semiconductor Index (FTXL), which is up 70% this year. The Xtrackers Semiconductor Select Equity ETF (CHPS) is up about 65%, according to the article.
Chip stocks are also increasingly influencing tech funds that target broader themes. Micron, SK Hynix, and Intel account for more than a quarter of the Invesco AI and Next Gen Software ETF (IGPT), an index of companies with significant exposure to technologies or products that contribute to future software development.
The article says the fund has long held semiconductor stocks, but their weight increased over the past year as chip shares rallied and software stocks fell amid uncertainty about AI’s impact on the industry. Between early 2025 and 2026, software’s share of the index declined from 21% to 11%, while semiconductors’ share increased from 31.5% to 45%.
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