##  [# SMH, AI ETFs Rise on Nvidia Blackwell Hope](/sections/news/smh-ai-etfs-rise-nvidia-blackwell-hope) 

 

# SMH, AI ETFs Rise on Nvidia Blackwell Hope

 

 

Tech investors gain optimism on fading Taiwan fears and rising Nvidia expectations.



 

 

 

 

 [![kent](/sites/default/files/styles/author_image_icon/public/2023-03/Kent_0.png?itok=V1U_V6-d "kent")](/authors/kent-thune) 

[By Kent Thune ](/authors/kent-thune)

 Jul 23, 2024

 Edited by: James Rubin

 

 

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After logging one of the worst weeks for semiconductor stocks in 2024, AI ETFs started a new week with healthy gains as optimism about Nvidia returned, and investors felt a Trump presidency was less assured.

The largest AI exchange-traded fund with Nvidia as a top holding, the [**VanEck Semiconductor ETF (SMH)**](https://www.etf.com/SMH), rose nearly 4% on the renewed optimism.

Excitement around Nvidia comes as its promising Blackwell architecture for generative AI returned to focus and President Biden’s exit from the November election neutralized former president [Trump’s questioning U.S. support for Taiwan](https://www.etf.com/sections/news/smh-semiconductors-hit-trump-taiwan-talk) last week.

NVDA rose nearly 5% and TSM gained more than 2% in Monday trading.

## AI ETFs and Nvidia’s Blackwell

The incredible rise of AI ETFs has largely been supported by the dominance of Nvidia stock, the top holding in many of these mega-cap tech funds. Nvidia’s gains have been driven by its ability to beat earnings forecasts. [Nvidia's Blackwell](https://www.nvidia.com/en-us/data-center/technologies/blackwell-architecture/) release date is expected in late 2024 to early 2025, and excitement over the “[new era](https://nvidianews.nvidia.com/news/nvidia-blackwell-platform-arrives-to-power-a-new-era-of-computing)” GPU architecture is expected by many analysts to be transformative for artificial intelligence.

Here's a breakdown of what Blackwell brings to the table:

- **Focus on Generative AI**: Unlike previous Nvidia architectures geared toward diverse computing tasks, Blackwell is purpose-built for generative AI, a rapidly growing field focused on creating new content like text, images, or code.
- **Unmatched Performance:** Nvidia says that Blackwell delivers 30 times better performance on large language models compared to its predecessor. This significant leap allows for more complex and powerful AI applications.
- **Increased Efficiency:** The company says that Blackwell will have 25 times greater energy efficiency compared to the prior generation. This may translate to lower operational costs for businesses and reduced environmental impact.
- **Custom Manufacturing Process:** Blackwell GPUs are built using a 4NP manufacturing process tailored by TSMC, a leading chip manufacturer. This customization should improve power and performance, the company says. **Superchip Design:** Blackwell GPUs use a "superchip" design featuring two interconnected dies. This essentially creates a single, powerful AI processing unit.
- **High Bandwidth Connectivity:** The two dies within a Blackwell GPU are linked by a high-speed, 10 terabytes per second (TB/s) connection, enabling efficient data transfer and processing.

Investors are banking that the Blackwell architecture will represent a significant leap in AI processing capabilities that can improve different fields, including natural language processing, computer vision and robotic automation. How this affects price remains uncertain.

 
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 [ Kent Thune CFP, Senior Content Editor ](/authors/kent-thune) 

 

 

  Kent Thune is Senior Content Editor for etf.com, focusing on educational content, thought leadership, content management and search engine…   [View Bio](/authors/kent-thune)

 



 

 


 Related Topics  [Semiconductors](http://www.etf.com/topics/semiconductors) 

 [Technology](http://www.etf.com/topics/technology) 

 [Growth](http://www.etf.com/topics/growth) 

 [Equity](http://www.etf.com/topics/equity) 

 [VanEck](http://www.etf.com/topics/vaneck)