VanEck’s AI-Fueled Chip Fund Hits Record High Amid Rising Bearish Warnings

VanEck Semiconductor UCITS ETF surges 140% over 12 months, but short seller Michael Burry and technical indicators flash caution. Nvidia earnings next key event.

The VanEck Semiconductor UCITS ETF stormed to a new 52-week high on Friday, closing at €88.07 and capping a 6% daily surge that underscores the market’s insatiable appetite for artificial-intelligence hardware. But even as the fund prints eye-popping returns — up 13.59% in the past week, 33.38% over the month, and 140.50% over twelve months — the rally is drawing sharp warnings from well-known short sellers and flashing technical red flags that suggest the semiconductor euphoria may be overheating.

AI Supercycle Meets Geopolitical Tailwinds

Market participants attribute the relentless climb to what some call an “AI memory supercycle,” where voracious demand for computing power continuously lifts chip prices and production volumes. The narrative gained further momentum after South Korea and the Netherlands announced deeper cooperation on chip technology, underscoring the strategic importance of semiconductor supply chains. The Philadelphia Semiconductor Index had already surged more than 65% this year as of May 10, confirming that the sector’s strength is broad?based.

Within the VanEck ETF’s portfolio, two heavyweights powered the latest leg higher. Micron Technology rocketed 15.49% in a single trading session, while Advanced Micro Devices jumped 11.44%. ASML added nearly 5% and Broadcom advanced more than 4%. Nvidia, the fund’s largest single holding, rose more modestly but remains the central pillar of the AI story.

Portfolio Composition and Fund Structure

The ETF tracks the MVIS US Listed Semiconductor 10% Capped ESG Index and uses physical replication, reinvesting dividends. As of May 8, assets under management stood at $7.4 billion (roughly €5.98 billion). The ten largest positions collectively represent about 78% of the fund, with the following top five:

• Nvidia: 16.91%
• Taiwan Semiconductor Manufacturing: 10.30%
• Intel: 7.65%
• Broadcom: 7.37%
• AMD: 6.67%

Launched as Europe’s first pure?play semiconductor UCITS ETF, the vehicle charges a total expense ratio of 0.35% per year. Its annualized volatility of 43% underscores the sector’s inherent turbulence even as the fund delivers outsized gains.

Cracks in the Rally? Burry and Technicals Flash Caution

The breakneck pace has not gone unnoticed by skeptical investors. Michael Burry, the investor famous for betting against the housing bubble, has built short positions against semiconductor ETFs and individual chip stocks including Nvidia. His positions run through January 2027, and he has drawn parallels to the dot?com era, warning of a correction in the range of 25% to 30%.

Technical indicators reinforce the caution. The ETF currently trades 61.34% above its 200?day moving average, while the relative strength index sits at 70.5 — a level that does not automatically signal a reversal but leaves little margin for error. “The market is pricing in perfection,” one strategist noted, “and perfection is hard to sustain.”

Nvidia Earnings: The Next Inflection Point

All eyes are now on May 20, when Nvidia reports quarterly results. A strong earnings beat and an optimistic outlook could ignite another leg of the AI rally and keep the ETF aloft. A disappointment, however, would expose the froth that Friday’s close already hints at, potentially triggering the pullback that bears are positioning for.

For now, the VanEck Semiconductor UCITS ETF remains a benchmark for the AI infrastructure boom — and a test case of how far momentum can carry a sector before gravity reasserts itself.