Chip ETF Rebounds After Brutal Sell-Off as Nvidia CEO Reassures Markets on AI's Long-Term Trajectory

VanEck Semiconductor UCITS ETF snaps back 3.57% as Nvidia CEO urges optimism; sector had suffered worst rout since 2020, but long-term AI demand signals remain strong.

The VanEck Semiconductor UCITS ETF snapped back 3.57% on Monday to €95.33, clawing back some ground after the sector suffered its worst single-day rout since March 2020. The catalyst was a timely intervention by Nvidia chief Jensen Huang, who used a visit to Seoul to urge investors to look past the panic. “Everyone should be excited” about the AI-driven future, he declared, arguing that the infrastructure buildout has barely begun.

That message provided a lifeline for a fund that had just endured a harrowing week. On Friday, the Philadelphia Semiconductor Index cratered by 10%, wiping out more than a trillion dollars in market value. The damage was triggered by a double blow: Broadcom's third-quarter AI chip revenue forecast of $16 billion fell short of the $17.2 billion analysts had pencilled in, and the company declined to raise its full-year AI outlook. Shares in Broadcom tumbled 14%, while Nvidia lost 6% and AMD plunged nearly 11%. A sizzling US jobs report for May added fuel to the fire, rekindling fears that the Federal Reserve might keep monetary policy tighter for longer — a toxic brew for richly valued tech stocks.

Yet the sell-off comes against a backdrop of extraordinary long-term gains. Over the past twelve months, the ETF has surged 149.42%, climbing from a low of around €38 in June 2025 to an all-time peak near €103 in early June. Even after the correction, the fund has advanced 73.45% since January. Its 200-day moving average hovers at roughly €60, meaning the current price still trades more than 50% above that key technical level — a sign that the underlying trend remains firmly bullish.

Concentration in a handful of heavyweights explains both the fund's explosive upside and its vulnerability to sharp reversals. Micron Technology accounts for 14.11% of assets, Advanced Micro Devices 11.90%, and ASML rounds out the top three. Broadcom, Nvidia, TSMC and Intel each carry weightings between 7% and 8%. The MVIS US Listed Semiconductor 10% Capped ESG Index does limit single stocks to a maximum of 10%, which reduces the concentration risk relative to a pure market-cap-weighted benchmark, but the top holdings still dictate the fund's overall performance.

Markets strategists were quick to dismiss Friday's carnage as a technical repositioning rather than a fundamental breakdown. Ohsung Kwon, chief equity strategist at Wells Fargo, called it a classic case of an overbought sector unwinding. “The sales are position-driven, not the end of the bull market for chips,” he said, a view echoed by other analysts who point to intact demand signals.

Those signals remain robust. During his Seoul visit, Huang revealed that SK Hynix's capacity for high-bandwidth memory chips is already fully booked through 2027, and the next-generation HBM4 is on track for mass production in 2026. Broadcom, despite its guidance miss, stands by its target of generating over $100 billion in AI revenue by 2027, backed by long-term partnerships with Google, Meta and Anthropic. The structural story — that the AI boom is shifting from a GPU-only narrative to a broader ecosystem spanning design, manufacturing and equipment — continues to benefit the ETF's diversified exposure across the chip value chain.

With $8.1 billion in assets under management and a total expense ratio of just 0.35%, the VanEck Semiconductor UCITS ETF remains one of the most liquid and cost-effective vehicles for investors betting on the semiconductor cycle. Its 30-day annualised volatility of 46% is a stark reminder of the ride they are signing up for. But Monday's bounce, driven by the industry's most influential CEO, may prove to be more than a dead-cat rally — provided Huang's optimism about the decade-long AI buildout proves well-founded.