The iShares Semiconductor ETF (NASDAQ:SOXX) has gone vertical. SOXX trades near $569, up 89% year to date and 174% over the past year, a run powered less by valuation re-rating than by the cash that hyperscalers are physically wiring into AI data centers. If you own SOXX today, you are betting that the AI capex cycle keeps compounding through 2027, and that the fund’s quarterly rebalance does not strand you in the wrong names when it inflects.
What SOXX actually owns right now
SOXX tracks the ICE Semiconductor Index, a modified equal-weight basket of roughly 30 U.S.-listed chip names, with a 0.34% expense ratio. The methodology caps single-name weights near 8% to 10% at rebalance, but between rebalances the winners drift higher. That drift is doing the heavy lifting in 2026. Micron Technology (NASDAQ:MU | MU Price Prediction) is up 240% YTD, Intel (NASDAQ:INTC) is up 211%, and Advanced Micro Devices (NASDAQ:AMD) is up 141%, while NVIDIA (NASDAQ:NVDA) has lagged the basket. That dispersion is the real story for holders.
The macro factor: hyperscaler AI capex commitments
The single variable with the most power over SOXX over the next 12 months is hyperscaler capital spending. Every top SOXX holding now lives or dies on Meta, Microsoft, Alphabet, Amazon and Oracle order books. The cleanest tell is in NVIDIA’s own filings. In Q1 FY27, NVIDIA reported Data Center revenue of $75.25 billion, up 92% YoY, guided Q2 to $91 billion, and disclosed total supply commitments of $119 billion. Broadcom is targeting more than $100 billion in AI semiconductor revenue by 2027, and Micron says its HBM order book is committed into 2027.
What to watch concretely: the quarterly capex guides from the five hyperscalers, NVIDIA’s supply-commitments line in its 10-Q (it has stepped up every quarter from $95 billion in Q4 to $119 billion in Q1), and any softening in Broadcom’s AI revenue guide. Check after each hyperscaler reports, roughly four windows per year. A single quarter where two hyperscalers cut capex guidance would be the first credible signal that the cycle is rolling over, and SOXX, given its high beta to that cycle, would compress fastest.
The fund-specific factor: NVDA concentration into the next rebalance
The structural risk inside SOXX right now is that NVIDIA, the largest single holding, has materially underperformed the basket this year while Micron, Intel and AMD have ripped. With modified equal-weighting, that means the next quarterly rebalance will mechanically trim the runners and top up NVIDIA back toward the cap. If you bought SOXX expecting concentrated NVIDIA exposure, you are getting less of it than you think; if you bought it for diversified AI exposure, the rebalance will pull you back into the laggard.
This matters because NVIDIA’s growth profile is still accelerating, with revenue up 85% YoY and gross margin holding at 75%, yet shares trade around $211. Investors who want heavier mega-cap AI exposure may prefer the VanEck Semiconductor ETF, which leans further into NVIDIA and TSMC. Watch BlackRock’s monthly holdings disclosure on the SOXX fact sheet for the post-rebalance weights, and Commerce Department BIS export-rule updates, since any easing on China shipments would disproportionately boost NVIDIA inside the basket and reverse the recent dispersion.
The signal that matters
If hyperscaler capex guides hold or rise through the next two reporting cycles, SOXX has room to run, but the post-rebalance NVIDIA weight is what will decide whether holders capture it or watch from the sidelines. Track NVIDIA’s supply-commitments number and the next SOXX rebalance file. Those two data points tell you almost everything that matters.
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