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All year long, stock market bulls have been trumpeting the “AI” data center trade.
Let’s look into the major semi-chip ETF, to see what the semi-chip returns status is.
In the critical Zacks ETF Technology Sector category, the top three ETFs -- by market capitalization -- are as follows:
A. The Vanguard Info Tech (VGT - Free Report) ETF fund, at $112.9B. B. The SPDR Sector Tech Select (XLK - Free Report) fund, at $93.6B.
Then…
C. The VanEck Semiconductor ETF (SMH - Free Report) at $35.6B.
This semi chip ETF is currently at a Zacks ETF Rank #1. A short-term “Strong Buy.”
Here are the top VanEck Semi ETF portfolio holdings, ranked by the 52-week returns…
Image Source: Zacks Investment Research
Surprisingly, the Nvidia (NVDA - Free Report) 52-week returns at +30% are the lowest, in the top 10.
Want one of the biggest longer-term stock investing issues, entering 2026?
Are these key “AI” chip sector’s share returns all priced-in, and then some?
Consider Micron’s Zacks Price, Consensus, and EPS Surprise chart (below):
Image Source: Zacks Investment Research
That recent share price run is shocking to view.
Read on.
To see where our top-down telescope is identifying large cap opportunities this month.
Zacks December 2025 Sector/Industry/Company Telescope
Nov. 28th, 2025 data show 2 leaders: Financials & Info Tech at Very Attractive.
Info Tech earnings growth has “AI” data/cloud centers & tech mega-cap earnings. Record high prices in stock markets and Fed policy rate cuts lift the Financials.
Utilities stayed at Attractive. “AI” data center electricity use keeps it strong.
Communications stayed a Market Weight. Telco Equipment ranked high, again. Health Care stayed at a Market Weight rating. Medical-Products is the strong hand.
Covering analyst consumer spending concerns build – with a weak U.S. job market. Consumer Discretionary stayed at an Unattractive rating, while Consumer Staples fell back to a Very Unattractive rating.
Energy sectors stayed Unattractive. Materials stayed Very Unattractive.
(1) Financials stayed at Very Attractive. Investment Banking and Banks & Thrifts looked best.Finance and Major Banks looked good too.
Zacks #1 Rank (STRONG BUY): Deutsche Bank (DB - Free Report)
(2) Info Tech stayed at Very Attractive. Semis, Electronics, and Misc. Tech led.
A Review of the Major Chip ETF: Zacks DEC 2025 Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full Dec Market Strategy report To access the full PDF, click here.
All year long, stock market bulls have been trumpeting the “AI” data center trade.
Let’s look into the major semi-chip ETF, to see what the semi-chip returns status is.
In the critical Zacks ETF Technology Sector category, the top three ETFs -- by market capitalization -- are as follows:
A. The Vanguard Info Tech (VGT - Free Report) ETF fund, at $112.9B.
B. The SPDR Sector Tech Select (XLK - Free Report) fund, at $93.6B.
Then…
C. The VanEck Semiconductor ETF (SMH - Free Report) at $35.6B.
This semi chip ETF is currently at a Zacks ETF Rank #1. A short-term “Strong Buy.”
Here are the top VanEck Semi ETF portfolio holdings, ranked by the 52-week returns…
Image Source: Zacks Investment Research
Surprisingly, the Nvidia (NVDA - Free Report) 52-week returns at +30% are the lowest, in the top 10.
Want one of the biggest longer-term stock investing issues, entering 2026?
Are these key “AI” chip sector’s share returns all priced-in, and then some?
Consider Micron’s Zacks Price, Consensus, and EPS Surprise chart (below):
Image Source: Zacks Investment Research
That recent share price run is shocking to view.
Read on.
To see where our top-down telescope is identifying large cap opportunities this month.
Zacks December 2025 Sector/Industry/Company Telescope
Nov. 28th, 2025 data show 2 leaders: Financials & Info Tech at Very Attractive.
Info Tech earnings growth has “AI” data/cloud centers & tech mega-cap earnings. Record high prices in stock markets and Fed policy rate cuts lift the Financials.
Utilities stayed at Attractive. “AI” data center electricity use keeps it strong.
Communications stayed a Market Weight. Telco Equipment ranked high, again. Health Care stayed at a Market Weight rating. Medical-Products is the strong hand.
Covering analyst consumer spending concerns build – with a weak U.S. job market. Consumer Discretionary stayed at an Unattractive rating, while Consumer Staples fell back to a Very Unattractive rating.
Energy sectors stayed Unattractive. Materials stayed Very Unattractive.
(1) Financials stayed at Very Attractive. Investment Banking and Banks & Thrifts looked best. Finance and Major Banks looked good too.
Zacks #1 Rank (STRONG BUY): Deutsche Bank (DB - Free Report)
(2) Info Tech stayed at Very Attractive. Semis, Electronics, and Misc. Tech led.
Zacks #1 Rank (STRONG BUY): Vertiv (VRT - Free Report)
(3) Utilities stayed Attractive. Utility-Water Supply remained the best, again.
Zacks #1 Rank (STRONG BUY): Edison International (EIX - Free Report)
(4) Communications Services stayed at Market Weight. Telco Equip’t was best, again.
(5) Industrials stayed at Market Weight. Metal Fabricating & Pollution Control, were its strongest industries.
(6) Health Care stayed at Market Weight. Medical Products was the best, again.
(7) Energy stayed at Unattractive. Oil & Gas E&P, Energy-Alternates, and Drillers looked the best.
(8) Consumer Discretionary stayed at Unattractive. Consumer Electronics and Non-Food Retail/Wholesale looked the best, again.
(9) Consumer Staples fell back to Very Unattractive from Unattractive. Beverages was the best here.
(10) Materials stayed at Very Unattractive. Metals-non-Ferrous stayed solid (Record high gold and silver prices!).
Conclusion
December is here. The last month of the year.
YTD 2025 U.S. returns look excellent.
The prior two years delivered exceptional annual returns years for U.S. share indices.
Let’s see where this bullish stock market finishes the year.
Enjoy the rest of my DEC Zacks Market Strategy report!
Warm regards,
John Blank, PhD.
Zacks Chief Equity Strategist and Economist