Semiconductor stocks have remained among the market’s strongest performers in recent years. The rapid adoption of artificial intelligence (AI), particularly generative AI, has fueled demand for chips and turned the sector into an attractive investment opportunity.

The semiconductor industry has delivered an especially strong performance so far this year, with sales accelerating at a significant pace. Continued heavy spending on AI infrastructure is expected to provide further support, creating a favorable outlook for the chip industry.

Given the upbeat sentiment, investing in semiconductor funds such as Fidelity Advisor Semiconductors Fund Class I (FELIX Quick QuoteFELIX - Free Report) , Fidelity Select Technology Portfolio (FSPTX Quick QuoteFSPTX - Free Report) and T. Rowe Price Science & Tech (PRSCX Quick QuotePRSCX - Free Report) stands out as an attractive opportunity.

Semiconductor Sales Surge Past $1 Trillion   

Global semiconductor sales reached $159.7 billion in August, up 8% from July’s $147.9 billion, according to data released by the Semiconductor Industry Association (“SIA”) earlier this week. Compared with August 2025, sales jumped 144.3% from $65.4 billion.

The industry also achieved a historic milestone, with cumulative global semiconductor sales exceeding $1 trillion through August for the first time. The SIA expects total sales to climb above $1.6 trillion by the end of 2026.

Michael Robbins, SIA president and CEO, said, “The global semiconductor market grew for the 18^th consecutive month in August, with sales into the Americas, the Asia Pacific, and China driving strong and sustained year-to-year growth.”

Sales increased during each of the first eight months of 2026. Earlier in the year, however, investors questioned whether the extraordinary gains in AI-related stocks and the industry’s rapid expansion could continue, weighing on semiconductor shares.

Those concerns proved temporary as massive investments from leading technology companies renewed confidence in AI’s long-term prospects. Semiconductor companies benefiting from the AI boom also posted strong quarterly results and provided optimistic outlooks, helping alleviate investor concerns and reigniting a rally in chip stocks.

The semiconductor sector has also been an important driver of broader market gains in recent years. The industry’s strong August performance followed an impressive first half of 2026. Global semiconductor sales reached $403.3 billion in the second quarter and $298.5 billion in the first quarter, marking sequential increases of 33.1% and 25%, respectively.

Semiconductors now serve as a fundamental component across numerous established and emerging technologies. Chips are powering innovation in areas ranging from the Internet of Things (IoT) and 6G connectivity to artificial intelligence.

Demand from the automotive industry has provided another important source of growth for semiconductor sales. At the same time, AI remains in the early stages of a broader expansion, encouraging leading technology companies to spend billions of dollars on AI research, development and infrastructure.

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).

Fidelity Advisor Semiconductors Fund Class I seeks capital appreciation. FELIX invests primarily in common stocks. Fidelity Advisor Semiconductors Fund Class I normally invests at least 80% of its assets in securities of companies principally engaged in the design, manufacture, or sale of electronic components; equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors. 

Fidelity Advisor Semiconductors Fund Class I has a track record of positive total returns for over 10 years. Specifically, FELIX’s returns over the three- and five-year benchmarks are 49.4% and 34.8%, respectively. The annual expense ratio of 0.66% is lower than the category average of 0.98%. FELIX has a Zacks Mutual Fund Rank #1.

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

Fidelity Select Technology Portfolio seeks capital appreciation by investing most of its assets in common stocks of companies principally engaged in offering, using, or developing products, processes, or services that will provide or benefit significantly from technological advances and improvements.

Specifically, Fidelity Select Technology Portfolio’s returns over the three- and five-year benchmarks are 34.4% and 19.3%, respectively. FSPTX has a Zacks Mutual Fund Rank #1 and its annual expense ratio of 0.6% is lower than the category average.

To see how this fund performed compared to its category, and other #1 and 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 31.2% and 14.5%, respectively.  PRSCX’s annual expense ratio of 0.78% is lower than the category average of 1.03%. 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.

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