Nvidia's $5 Trillion Milestone Turns These AI ETFs Into Hot Trades

NVIDIA Corp.‘s (NASDAQ:NVDA) market cap just did what no company in history has: crossed the $5 trillion threshold, and ETF investors are racing to catch the wave.

The milestone, fueled by blockbuster AI deals and surging chip demand, has turned semiconductor ETFs into the hottest trade in town.

ETFs Riding The Nvidia Supercycle

The rally has rippled across funds with heavy Nvidia exposure. The VanEck Semiconductor ETF (NASDAQ:SMH), which counts Nvidia as its top holding, jumped as investors priced in stronger AI infrastructure demand. The fund ended Wednesday with 1.5% gains after surging even higher earlier in the day. The Strive U.S. Semiconductor ETF (NYSE:SHOC) and VanEck Fabless Semiconductor ETF (NASDAQ:SMHX) also climbed 2% on Wednesday as Nvidia hit the record-breaking milestone, benefiting from the dominance of NVIDIA in the fabless chip segment.

Options-based funds, such as the YieldMax Target 12 Semiconductor Option Income ETF (NYSE:SOXY), have found fresh popularity with yield-starved investors looking for income without missing out on upside.

The ETF momentum is partly a reflection of how Nvidia has become the benchmark for AI growth, a sentiment play that’s spreading to the entire semiconductor complex.

Supercomputers, Self-Driving Cars and A Supply Crunch

In all, Nvidia’s rally began a week ago with a barrage of announcements at its GTC event in Washington, D.C. The company announced collaborations with the U.S. Department of Energy on seven new AI supercomputers, Uber Technologies Inc (NYSE:UBER) on 100,000 autonomous vehicles through 2027, and Eli Lilly And Co (NYSE:LLY) and Nokia Oyj (NYSE:NOK) on biotech and 6G initiatives, respectively.

At the same time, SK Hynix, a critical Nvidia memory supplier, said its entire 2026 output is already sold out, pointing to an extended AI-driven chip boom. That gives the semiconductor trade long-term legs, reinforcing ETF investors’ conviction.

Trade Truce Tailwinds?

With a U.S.–China trade thaw post a meeting between U.S. President Donald Trump and Chinese President Xi Jinping, Nvidia could regain access to its biggest overseas market. An easing of export restrictions would further strengthen the earnings outlook for the chipmaker and ETFs hitched to its success.

Nvidia’s $5 trillion valuation underlines how strongly the AI story has merged with ETF investing. For as long as GPUs remain at the heart of the global race in AI, semiconductor ETFs might keep rewriting their own record books — one trillion at a time.

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Photo: Mehaniq via Shutterstock