SMH vs QQQ Stock Comparison: AI Score, Valuation, Performance and Upside
SMH offers pure-play semiconductor sector exposure with very high cyclical beta, while QQQ offers broader Nasdaq-100 large-cap growth exposure with meaningful but diluted chip weighting. Investors who want to maximize AI chip cycle exposure choose SMH; investors who want broad large-cap growth with tech and semiconductor exposure as part of a diversified portfolio typically prefer QQQ.
SMH vs QQQ is the decision between maximum semiconductor sector concentration and diversified large-cap Nasdaq growth — SMH amplifies the chip cycle in both directions, while QQQ smooths it with software, consumer, and biotech exposure.
QQQ holds the edge across 4 of 5 key metrics in this comparison. SMH has delivered stronger 1-year price return (+81.34% vs +21.77% for QQQ).
- prefer a pure-play semiconductor sector position during AI chip supercycle conditions
- value the inclusion of TSMC and ASML for global semiconductor supply chain exposure
- want maximum sensitivity to AI data center spending on GPU and accelerator chips
- are comfortable with higher volatility and deeper drawdowns during semiconductor inventory corrections
- prefer broad Nasdaq-100 growth exposure across technology, consumer, and healthcare sectors
- value the lower 0.20% expense ratio and superior options market liquidity for hedging
- want semiconductor exposure as part of a diversified large-cap growth portfolio without semiconductor cycle concentration
- are comfortable with FAANGM megacap concentration as the dominant return driver within the fund
| Metric | SMH | QQQ |
|---|---|---|
| ETF scorei | 90.0 | 81.0 |
| Latest closei | $573.00 | $721.45 |
| 1M returni | +2.15% | +0.75% |
| 6M returni | +48.93% | +24.24% |
| 1Y returni | +81.34% | +21.77% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | SMH | QQQ |
|---|---|---|
| 1Y ago | $18.19K (+81.9%) started 2025-09-18 | $12.24K (+22.4%) started 2025-09-18 |
| 5Y ago | $46.06K (+360.6%) started 2021-09-20 | $20.93K (+109.3%) started 2021-09-20 |
| 10Y ago | $207.5K (+1975.0%) started 2016-09-19 | $70.75K (+607.5%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | SMH | QQQ |
|---|---|---|
| Expense ratioi | 0.35% | 0.18% |
| Total assets (AUM)i | $67.79B | $488.98B |
| Dividend yieldi | 0.20% | 0.42% |
| Trailing P/Ei | 39.14 | 29.41 |
| Betai | 1.79 | 1.24 |
| 52-week change | 81.34% | 21.77% |
| Metric | SMH | QQQ |
|---|---|---|
| 1Y returni | +81.34% | +21.77% |
| 6M returni | +48.93% | +24.24% |
| 1M returni | +2.15% | +0.75% |
| 1Y Sharpe ratio | 1.59 | 0.87 |
| Betai | 1.79 | 1.24 |
| Dividend yieldi | 0.20% | 0.42% |
| 5Y CAGR | +34.95% | +15.24% |
Over the past year, SMH and QQQ have moved strongly in the same direction (correlation of 0.90), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | SMH | QQQ |
|---|---|---|---|
| 1Y | Growthi | +81.34% | +21.77% |
| CAGRi | +81.41% | +21.79% | |
| Volatilityi | 39.65% | 19.69% | |
| Sharpe ratioi | 1.59 | 0.87 | |
| Sortino ratioi | 2.31 | 1.27 | |
| Max drawdowni | 24.62% | 11.96% | |
| Current drawdowni | 14.34% | 3.21% | |
| Avg drawdowni | 5.75% | 3.15% | |
| Ulcer Indexi | 8.30% | 4.00% | |
| Max daily dropi | 9.22% | 4.80% | |
| Max wkly dropi | 14.09% | 6.79% | |
| 5Y | Growthi | +346.72% | +103.05% |
| CAGRi | +34.95% | +15.24% | |
| Volatilityi | 36.81% | 22.98% | |
| Sharpe ratioi | 0.88 | 0.54 | |
| Sortino ratioi | 1.29 | 0.77 | |
| Max drawdowni | 45.30% | 35.12% | |
| Current drawdowni | 14.34% | 3.21% | |
| Avg drawdowni | 12.22% | 9.18% | |
| Ulcer Indexi | 16.52% | 13.59% | |
| Max daily dropi | 9.83% | 6.21% | |
| Max wkly dropi | 15.31% | 11.98% | |
| 10Y | Growthi | +1783.49% | +560.40% |
| CAGRi | +34.14% | +20.79% | |
| Volatilityi | 33.49% | 22.54% | |
| Sharpe ratioi | 0.91 | 0.75 | |
| Sortino ratioi | 1.32 | 1.07 | |
| Max drawdowni | 45.30% | 35.12% | |
| Current drawdowni | 14.34% | 3.21% | |
| Avg drawdowni | 8.68% | 6.23% | |
| Ulcer Indexi | 12.91% | 10.38% | |
| Max daily dropi | 14.41% | 11.98% | |
| Max wkly dropi | 19.23% | 16.20% |
| Category | SMH | QQQ |
|---|---|---|
| Fund name | VanEck Semiconductor ETF | Invesco QQQ Trust |
| Type | ETF | ETF |
| Expense ratioi | 0.35% | 0.18% |
| Total assets (AUM)i | $67.79B | $488.98B |
| Dividend yieldi | 0.20% | 0.42% |
- 100% semiconductor sector concentration gives direct exposure to AI chip demand, data center build-out, and EV semiconductor content growth
- Includes TSMC and ASML, the two globally dominant advanced chip manufacturing and lithography equipment suppliers
- Higher beta to AI chip spending cycles than any diversified tech ETF including QQQ
- Broader diversification across 100 companies in technology, consumer, healthcare, and other sectors reduces single-industry cyclical risk
- 0.20% expense ratio is lower than SMH's 0.35%, saving cost over long holding periods
- Largest non-S&P 500 ETF by AUM and options market liquidity, comparable to SPY in derivatives depth
- Semiconductor industry is cyclical — SMH underperforms significantly during inventory correction and PC/smartphone demand downturns
- 0.35% expense ratio is meaningfully higher than QQQ's 0.20%
- Extreme concentration in 25 names means idiosyncratic stock risk (one major miss) can drive significant drawdowns
- Heavy concentration in FAANGM-type megacap tech (AAPL, MSFT, AMZN, NVDA, GOOGL, META) — top 10 holdings often exceed 50% of assets
- Semiconductor exposure is meaningful (~20–25%) but diluted by software and consumer names — investors wanting pure chip exposure should use SMH instead
- Nasdaq-100 methodology can include non-tech companies that investors may not expect in a 'tech ETF'
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