SMH Semiconductor ETF Hits $607.81 on Strong Chip Demand, June 02

The VanEck Semiconductor ETF (SMH) climbed to $607.81 on June 02, up 1.48% from the prior day. The fund has surged 66.31% year-to-date as hedge funds place record bets on AI-related chip holdings. Despite strong momentum, analyst Leopold Aschenbrenner has turned bearish on the sector, signaling potential headwinds ahead.

ETF Hits New Heights on AI Momentum

SMH reached $607.81 with a 1.48% daily gain and a 19.22% monthly increase. The fund’s year-to-date return of 66.31% reflects sustained demand for semiconductor exposure. Over the past year, SMH has climbed 149.82%, significantly outpacing broader market gains. The 50.02 price-to-earnings ratio shows the market is pricing in strong future growth from chip manufacturers.

Hedge Funds Bet Big on Semiconductor Stocks

Hedge funds are making their biggest-ever bet on AI with semiconductor names among their most popular holdings, according to Goldman Sachs research. Companies like Nvidia and other chip makers are central to AI infrastructure buildouts. This institutional demand has fueled SMH’s strong performance through 2026.

Technical Signals Flash Overbought Warning

SMH’s RSI stands at 72.57, indicating overbought conditions. The Stochastic oscillator reads 86.95, also suggesting the fund may be overextended in the short term. The ADX of 35.97 confirms a strong uptrend, but momentum indicators are stretched. Meyka rates SMH a B with a 12-month price target of $357.24, well below current levels, suggesting limited upside from here.

Aschenbrenner’s Bearish Call Clouds the Outlook

Leopold Aschenbrenner has publicly turned bearish on chip stocks, raising questions about sector valuations. His $8.5 billion fund positioning includes Corning, signaling a shift in semiconductor exposure. While hedge funds remain net buyers of the sector, this contrarian view highlights growing concern about stretched multiples and potential profit-taking ahead.

Final Thoughts

SMH has delivered strong returns on AI demand, but technical overbought signals and Aschenbrenner’s bearish stance suggest caution. Meyka’s B grade and $357.24 12-month target indicate the fund may face near-term pullback risk despite long-term semiconductor tailwinds.

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