Semiconductor stocks delivered a solid performance in 2025, and that momentum has carried into 2026, fueled by the relentless excitement surrounding artificial intelligence (AI), particularly generative AI.

While a recent market pullback has rattled investors, chipmakers tied to AI continue to attract strong interest as sustained demand keeps revenue growth on track.

Given the upbeat sentiment, investing in semiconductor funds such as Janus Henderson Global Technology and Innovation Fund (JNGTX Quick QuoteJNGTX - Free Report) , T. Rowe Price Science & Tech (PRSCX Quick QuotePRSCX - Free Report) , and DWS Science and Technology A (KTCAX Quick QuoteKTCAX - Free Report) , stands out as an attractive opportunity.

AI Continues to Drive Semiconductor Demand

Semiconductor stocks have surged in 2026 as companies ramp up spending on AI infrastructure. Investor enthusiasm is no longer limited to the largest chipmakers. With valuation concerns rising for some industry giants, more capital has flowed into companies specializing in networking hardware, data storage and other AI-related technologies, helping broaden the sector's rally.

NVIDIA Corporation (NVDA Quick QuoteNVDA - Free Report) remains the dominant player in the industry by market value, while soaring demand for AI chips has also boosted memory-chip manufacturers like Micron Technology (MU Quick QuoteMU - Free Report) and semiconductor equipment suppliers such as Applied Materials (AMAT Quick QuoteAMAT - Free Report) .

Even so, elevated valuations have occasionally triggered profit-taking, leading to short-term declines despite the industry's favorable long-term outlook.

The Philadelphia Semiconductor Index (SOX) has climbed 74.2% so far this year. Meanwhile, the latest Semiconductor Industry Association (SIA) report showed that global semiconductor sales reached $298.5 billion in the first quarter, representing a 25% increase from the previous quarter.

The sector could receive another boost as agentic AI continues to gain traction, with leading technology companies investing billions of dollars in expanding AI infrastructure. Deloitte projects global semiconductor sales to hit $1 trillion in 2026, highlighting the industry's strong growth prospects as AI adoption accelerates.

Although the recent pullback has sparked some caution, the AI-driven growth story remains firmly in place. The current weakness appears to be a temporary correction rather than the end of the sector's broader upward trend.

3 Best Choices

We have, thus, selected three mutual funds with significant exposure to semiconductor producers. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above factors. Moreover, these funds have encouraging three- and five-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Janus Henderson Global Technology and Innovation Fund aims for long-term growth of capital and specializes in technology. JNGTX invests the majority of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology.

Janus Henderson Global Technology and Innovation Fund has a track of positive total returns for over 10 years. Specifically, JNGTX’s returns over the three and five-year benchmarks are 35.6% and 17.4%, respectively. The annual expense ratio of 0.78% is lower than the category average of 0.97%. JNGTX has a Zacks Mutual Fund Rank #2.

To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.

T. Rowe Price Science & Tech fund seeks to invest in long-term capital growth by investing at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement and use of science and technology. While most of PRSCX’s assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund’s objectives.

T. Rowe Price Science & Tech has a track record of positive total returns for over 10 years. Specifically, PRSCX’s returns over the three and five-year benchmarks are 39.4% and 17.6%, respectively. PRSCX’s annual expense ratio of 0.80% is lower than the category average of 1.01%. PRSCX has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.

DWS Science and Technology A fund seeks growth of capital. Under normal circumstances, KTCAX invests at least 80% of net assets in common stocks of U.S. companies in the technology sector.

DWS Science and Technology A fund has a track of positive total returns for over 10 years. Specifically, KTCAX’s returns over the three and five-year benchmarks are 34.4% and 17.9%, respectively. The annual expense ratio of 0.88% is lower than the category average of 0.99%. KTCAX carries a Zacks Mutual Fund Rank #2.

To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

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