The AI Gold Rush Is Moving to Chipmakers. Here are Two ETFs to Watch
As the AI trade evolves, semiconductor companies are emerging as the industry's most critical enablers, and ETFs offer a simple way to gain exposure.
The ‘picks and shovels’ adage is commonly used when discussing the Artificial Intelligence (AI) ecosystem because it not only captures its scale but also highlights the diverse incumbents across the network.
While initial discussions around AI have centred on hyperscalers (i.e., Amazon, Alphabet, Meta Platforms, Microsoft, and Oracle), there has been a noticeable rotation towards suppliers within the AI ecosystem, namely semiconductor firms, which is reflected in their compelling performance thus far in the year.
The AI Chip Boom Isn't a Smooth Ride
Over the past year, the S&P Semiconductors Select Industry Index Total Return has delivered exceptional gains, outperforming the S&P 500 Index.
However, performance has also been volatile, especially in recent months. A recent S&P Global memo attributes this volatility to elevated dispersion—how widely individual stock returns differ from one another—within the semiconductor industry.
In April 2026, the Semiconductor Select Industry Index’s dispersion reached a record 160%, twice the 80% dispersion of the Technology Select Sector Index.
Simply put, identifying winners and losers in the rapidly expanding semiconductor industry remains challenging, and companies’ earnings results and guidance can trigger significant market reactions.
Why Semiconductors Are Taking the Lead in AI
While the equity performance of semiconductor firms has been noteworthy, their weight within equity market indices is also increasing. At present, the two equity markets where AI has an outsized influence are U.S. equities and Korean Equities.
As a baseline, technology’s weight within the S&P 500 index is approximately 40%, and within the S&P Korea Broad Market Index (BMI) it is approximately 70%. As noted by S&P Global, the weight of Semiconductors & Semiconductor Equipment industry has increased rapidly within each equity market, rising from 4% and 6% of the weight in the S&P 500 and S&P Korea BMI, respectively, to 19% and 29%, respectively, as of June 30, 2026.
As such, semiconductors have been the driving force behind U.S. and Emerging Market equities (i.e. South Korea and Taiwan).
Within the AI trade, the semiconductor segment has rewarded investors, despite the volatility investors may experience. As many investors remember, the SaaS-apocalypse earlier this year weighed on software stocks, and they have yet to recover.
Regarding hyperscalers, current geopolitical uncertainty in the Middle East has resulted in rising oil prices and higher input, supply, and power costs for these firms. Given the prevailing backdrop, semiconductors are poised to continue being the main attraction within the AI ecosystem.
ETFs to Play the AI Semiconductor Theme
For Canadian investors seeking turnkey semiconductor exposure, the Global X Artificial Intelligence Semiconductor Index ETF (CHPS) and the iShares Semiconductor Index ETF (XCHP) are the two top-of-mind solutions worth considering.
CHPS seeks to replicate the performance of the PHLX US AI Semiconductor Index, which provides exposure to public companies listed on select US exchanges that are engaged in the AI semiconductor value chain.
XCHP is designed to replicate the performance of the NYSE Semiconductor Index, which reflects the performance of U.S.-listed equity securities in the semiconductor industry.
This article was written on July 23rd, 2026. Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
