The recent sell-off in artificial intelligence (AI)-related chip stocks may have unsettled markets, but the semiconductor industry appears to remain resilient. Semiconductor demand has stayed strong over the past three years, fueled by growing enthusiasm around AI.
The industry has had an especially strong year so far, with impressive sales growth during the first two quarters.
Given the upbeat sentiment, investing in semiconductor funds such as Fidelity Advisor Semiconductors Fund Class I FELIX, T. Rowe Price Science & Tech PRSCX, and Janus Henderson Global Technology and Innovation Fund JNGTX stands out as an attractive opportunity.
Solid Q2 Semiconductor Sales
Global semiconductor sales reached $403.3 billion in the second quarter of 2026, rising 33.1% from the previous quarter, the Semiconductor Industry Association (“SIA”) reported Thursday. On a month-over-month basis, chip sales totaled $134.5 billion in June, up 9.7% from May.
Compared with the same month last year, semiconductor sales jumped 123.6% in June. Global chip sales have now increased for 16 consecutive months, with sales rising during each of the first six months of 2026.
AI-focused semiconductor stocks have faced considerable pressure in recent weeks as investors have raised concerns about whether their rapid growth can continue. This has prompted investors to move away from chip stocks and toward more defensive areas of the market.
Still, the recent decline could prove temporary, as technology and semiconductor stocks have gone through similar sell-offs in the past. Despite such short-term setbacks, semiconductor companies have remained important contributors to broader market gains in recent years.
Strong second-quarter results follow an equally solid first quarter for the semiconductor industry. Semiconductor sales reached $298.5 billion in the first quarter, marking a 25% increase from the fourth quarter of 2025.
The Philadelphia Semiconductor Index (SOX) has gained more than 70% year to date. John Neuffer, SIA president and CEO, said, “Global chip sales are expected to exceed $1.5 trillion in 2026, with Q2 sales substantially outpacing sales in Q1 2026.”
Semiconductors have become key to almost every modern and emerging technology, supporting innovations ranging from the Internet of Things (IoT) and 6G connectivity to artificial intelligence (AI).
Rising demand from the automotive industry has also helped strengthen chip sales. At the same time, the AI sector, which remains in the early stages of its expansion, is pushing major technology companies to invest billions of dollars in AI research, development and infrastructure.
As these companies continue to increase their spending on AI infrastructure, investor sentiment toward semiconductor stocks has remained positive.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to semiconductor producers. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above factors. Moreover, these funds have encouraging three- and five-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Advisor Semiconductors Fund Class I seeks capital appreciation. FELIX invests primarily in common stocks. Fidelity Advisor Semiconductors Fund Class I normally invests at least 80% of its assets in securities of companies principally engaged in the design, manufacture, or sale of electronic components; equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Advisor Semiconductors Fund Class I has a track record of positive total returns for over 10 years. Specifically, FELIX’s returns over the three- and five-year benchmarks are 59.4% and 40.9%, respectively. The annual expense ratio of 0.66% is lower than the category average of 0.98%. FELIX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
T. Rowe Price Science & Tech fund seeks to invest in long-term capital growth by investing at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. While most of PRSCX’s assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund’s objectives.
T. Rowe Price Science & Tech has a track record of positive total returns for over 10 years. Specifically, PRSCX’s returns over the three- and five-year benchmarks are 39.4% and 17.5%, respectively. PRSCX’s annual expense ratio of 0.80% is lower than the category average of 1.01%. PRSCX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
Janus Henderson Global Technology and Innovation Fund aims for long-term growth of capital and specializes in technology. JNGTX invests at least the majority of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology.
Janus Henderson Global Technology and Innovation Fund has a track record of positive total returns for over 10 years. Specifically, JNGTX’s returns over the three- and five-year benchmarks are 35.6% and 17.4%, respectively. The annual expense ratio of 0.78% is lower than the category average of 0.97%. Janus Henderson Global Technology and Innovation Fund has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
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