One of the Biggest Chip ETFs Has Averaged 14% a Year Since 2001 and Just Made 118% in Twelve Months

The iShares Semiconductor ETF (SOXX) delivered a 118% return over the past 12 months, compressing roughly six years of normal gains into a single year on the back of AI infrastructure spending. The fund's long-term average since 2001 stands at 14.2% annually.

SOXX now trades at 67 times earnings, with concentrated exposure to NVDA, AMD, and AVGO driving the valuation premium. The multiple embeds expectations of sustained demand growth that historical patterns suggest may be difficult to maintain. Years following comparable surges have typically underperformed the fund's 14.2% baseline, according to The Motley Fool.

The sharp rally reflects institutional flows into AI infrastructure plays, but the current valuation leaves limited margin for error if enterprise spending on chips moderates or inventory cycles turn.