"The single biggest macro factor for XSD is the pace and durability of AI infrastructure spending. Hyperscalers are committing enormous capital to data center buildouts, and memory and logic chips sit at the center of that investment cycle."
"Micron's numbers make this concrete: Q1 FY2026 revenue reached $13.64 billion, up 57% year-over-year, with Cloud Memory Business Unit gross margins hitting 66%. Management has guided Q2 revenue to $18.70 billion, and order books are reportedly stretching into 2027."
"Cycle risk is real. Qualcomm already flagged it: industry-wide memory supply constraints are weighing on near-term handset demand, a ripple effect from the same AI-driven memory demand surge."
XSD has seen an 8% decline in the past month but a 52% increase over the past year, reflecting investor challenges. The fund employs an equal-weight strategy across 43 semiconductor holdings, balancing smaller and mid-cap companies with larger ones. The primary macro factor influencing XSD is AI infrastructure spending, with significant investments in data centers. Companies like Micron and Marvell report substantial revenue growth driven by this demand, but risks remain due to potential supply constraints and market fluctuations.
Read at 24/7 Wall St.
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