ETF Spotlight: SHOC Soars on Nvidia Euphoria

Despite dipping on Thursday, shares of the semiconductor-focused Strive U.S. Semiconductor ETF (SHOC) have jumped nearly 14% over the past month as the fund's largest holding, chip giant Nvidia Corp., reaches new heights.

The artificial intelligence chip giant represents more than 27% of the Strive Asset Management exchange-traded fund's portfolio. On Tuesday, Nvidia's market value surged to $3.34 trillion to surpass Microsoft Corp. as the world's most valuable publicly traded company. Nvidia's stock price was down Thursday, although it has risen more than 38% over the past month, the latest surge in a more than year-long rise that has taken the stock from around $14 per share at the beginning of 2023 to its current price over $130, adjusted for a recent 10-for-1 split.

SHOC, which has more than $80 million in assets under management, tracks an index of top 30 U.S.-listed companies representing the semiconductor sector. The fund uses natural language processing to choose and weight these mid- and large-cap stocks based on their near-term and potential revenue exposure to the sector. Strive assigns a revenue score to reflect near-term revenue exposure and a theme score to capture a company's competitive positioning with the former determining its selections. 

Nvidia's dramatic upturn has come as interest in artificial intelligence technology has skyrocketed. The company is the largest maker of the graphics processing units that power these systems. GPUs are faster than the central processing units that are behind other technologies, so they are ideal for AI applications such as machine learning and deep learning that must process massive amounts of information. 

Nvidia is also a leading developer of AI technologies, including AI accelerators and software frameworks that are key to making AI more accessible and powerful.

ASML Holding NV ADR (ADML), a provider of equipment for semiconductor manufacturers, and Advanced Micro Devices Inc. (AMD) are SHOC's second and third largest holdings, representing roughly 11% and 7% of SHOC's portfolio. ASML is up about 12% over the past month, while ADR has dropped more than 2% over the same period.