The semiconductor industry has been growing leaps and bounds over the past few years, and the stellar run has continued into this year, with global sales climbing in each of the year's first five months.
Robust demand fueled by the rapid expansion of artificial intelligence (AI) has significantly boosted chip revenues.
Given these trends, investing in semiconductor funds such as Fidelity Advisor Semiconductors Fund Class I FELIX, T. Rowe Price Science & Tech PRSCX and DWS Science and Technology A KTCAX, stands out as an attractive opportunity.
Semiconductor Industry Maintains Strong Momentum
The Semiconductor Industry Association (SIA) reported last week that global semiconductor sales reached $120.6 billion in May, rising a solid 9.2% from April's total of $110.5 billion. Compared with the same month a year earlier, sales surged 104.1% from $59.1 billion recorded in May 2025.
The industry has now reported monthly sales growth in each of the first five months of 2026, extending its streak to 15 consecutive months of gains.
John Neuffer, SIA president and CEO, said, “The global semiconductor market continued to grow substantially in May, hitting the highest-ever recorded monthly sales total and increasing on a month-to-month basis for the 15th consecutive month in May.”
Despite the impressive growth, AI-related semiconductor stocks have recently come under pressure, as investors grow concerned about the sector's rapid expansion and sustainability. This has prompted some investors to rotate into more defensive sectors.
However, such pullbacks have occurred before, and history suggests that they may be temporary. Semiconductor companies have consistently played a major role in driving the broader stock market higher over the past several years despite periodic corrections.
The strong performance in April and May followed an outstanding first quarter, during which global semiconductor sales climbed to $298.5 billion, representing a 25% sequential increase.
Semiconductors now serve as the foundation for a wide range of advanced technologies, including the Internet of Things (IoT), 6G communications and AI.
Demand from the automotive industry has also remained a key growth driver. At the same time, the rapidly evolving AI market continues to encourage major technology companies to invest billions of dollars in AI infrastructure and innovation.
As spending on AI-related infrastructure continues to accelerate, investor confidence in semiconductor companies has remained firmly intact.
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 60.7% and 41.3%, respectively. The annual expense ratio of 0.66% is lower than the category average. 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 39.6% and 17.5%, respectively. PRSCX’s annual expense ratio of 0.80% is lower than the category average. 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.
DWS Science and Technology A fund seeks growth of capital. Under normal circumstances, KTCAX invests at least 80% of net assets in common stocks of U.S. companies in the technology sector.
DWS Science and Technology A fund has a track record of positive total returns for over 10 years. Specifically, KTCAX’s returns over the three and five-year benchmarks are 36.1% and 19.2%, respectively. DWS Science and Technology A fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.88, which is lower than its category average.
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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