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AI demand keeps the chip cycle strong despite concerns over delayed return-on-investment.
ASML, TSMC signal sustained growth momentum.
ETFs like SMH, SOXX, XSD ride AI-driven demand wave.
While enthusiasm around artificial intelligence (AI) investing has been strong in recent years, there have been growing concerns related to payoffs from massive AI investments, too. AI firms such as OpenAI are racing fast with ambitious plans to pour hundreds of billions of dollars into data centers.
There are many other players — big or medium — that are investing heavily in AI.However, their progress on revenue generation to match these huge outlays has been much slower. The fear may raise doubts in some investors’ minds about whether the AI-led chip boom will continue or not.
Let’s delve a little deeper.
ASML Boosts 2026 Outlook on Stronger AI Demand
Chip behemoth ASML raised its 2026 sales outlook after delivering better-than-expected first-quarter revenues and profits, fueled by robust demand tied to AI chips.
Previously, the company had guided Q1 sales in the range of €8.2 billion to €8.9 billion, but actual results exceeded those expectations, strengthening confidence in its growth trajectory, as quoted on CNBC.
The Dutch chip equipment giant now projects 2026 net sales between €36 billion and €40 billion, an increase from its previous forecast of €34 billion to €39 billion.
Taiwan Semiconductor's Upbeat Results on AI Boom
Taiwan Semiconductor Manufacturing Co. (TSM - Free Report) , the world's largest contract chipmaker, also finished another record-breaking quarter, thanks to strong demand for AI chips. On April 10, 2026, the company reported a 35% surge in first-quarter revenues, as quoted on Reuters.
According to SemiAnalysis analyst Sravan Kundojjala, TSMC is likely to exceed its 30% annual growth target, as mentioned in a CNBC article. While smartphone and PC markets faced pressure due to memory shortages, the company’s AI segment more than made up for the weakness.
AI Boom Driving Semiconductor Demand
Demand for chips continues to outstrip supply, particularly as AI adoption accelerates. Customers are ramping up capacity expansion plans for 2026 and beyond, backed by long-term agreements, per ASML. Note that Taiwan Semiconductor Manufacturing Company is one of ASML’s largest clients.
ETFs in Focus
Against this upbeat backdrop, investors may keep a close eye on chip ETFs, such as VanEck Semiconductor ETF (SMH - Free Report) , iShares Semiconductor ETF (SOXX - Free Report) and State Street SPDR S&P Semiconductor ETF (XSD - Free Report) . These ETFs are poised for gains amid solid AI-led chip demand.
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Chip Boom in Fine Fettle: ETFs in Focus
Key Takeaways
While enthusiasm around artificial intelligence (AI) investing has been strong in recent years, there have been growing concerns related to payoffs from massive AI investments, too. AI firms such as OpenAI are racing fast with ambitious plans to pour hundreds of billions of dollars into data centers.
There are many other players — big or medium — that are investing heavily in AI.However, their progress on revenue generation to match these huge outlays has been much slower. The fear may raise doubts in some investors’ minds about whether the AI-led chip boom will continue or not.
Let’s delve a little deeper.
ASML Boosts 2026 Outlook on Stronger AI Demand
Chip behemoth ASML raised its 2026 sales outlook after delivering better-than-expected first-quarter revenues and profits, fueled by robust demand tied to AI chips.
Previously, the company had guided Q1 sales in the range of €8.2 billion to €8.9 billion, but actual results exceeded those expectations, strengthening confidence in its growth trajectory, as quoted on CNBC.
The Dutch chip equipment giant now projects 2026 net sales between €36 billion and €40 billion, an increase from its previous forecast of €34 billion to €39 billion.
Taiwan Semiconductor's Upbeat Results on AI Boom
Taiwan Semiconductor Manufacturing Co. (TSM - Free Report) , the world's largest contract chipmaker, also finished another record-breaking quarter, thanks to strong demand for AI chips. On April 10, 2026, the company reported a 35% surge in first-quarter revenues, as quoted on Reuters.
According to SemiAnalysis analyst Sravan Kundojjala, TSMC is likely to exceed its 30% annual growth target, as mentioned in a CNBC article. While smartphone and PC markets faced pressure due to memory shortages, the company’s AI segment more than made up for the weakness.
AI Boom Driving Semiconductor Demand
Demand for chips continues to outstrip supply, particularly as AI adoption accelerates. Customers are ramping up capacity expansion plans for 2026 and beyond, backed by long-term agreements, per ASML. Note that Taiwan Semiconductor Manufacturing Company is one of ASML’s largest clients.
ETFs in Focus
Against this upbeat backdrop, investors may keep a close eye on chip ETFs, such as VanEck Semiconductor ETF (SMH - Free Report) , iShares Semiconductor ETF (SOXX - Free Report) and State Street SPDR S&P Semiconductor ETF (XSD - Free Report) . These ETFs are poised for gains amid solid AI-led chip demand.