One of the largest tech-focused exchange-traded funds (ETFs), the SPDR S&P Information Technology ETF XLK, advanced for the 10th straight session on Dec. 5, 2026. The rally placed the ETF on track for its longest daily winning streak since September 2020, as mentioned in a CNBC article. The fund gained 3.5% last week, outperforming the broader market.
Big Tech Not Driving the Gains
Unlike typical rallies, mega-cap tech names aren’t responsible for the rally this time. Meta Platforms Inc META stock jumped 5.4% last week while Alphabet Inc Class A GOOGL shares added 1.1%. But both stocks are absent in XLK.
Note that Alphabet and Meta Platforms, both part of the S&P’s Communications-Services sector rather than technology, were not the primary drivers of the move in XLK, the same CNBC article mentioned. However, NVIDIA Corp NVDA — the top-most holding of the ETF — added over 4% last week.
Chipmakers and Software Stocks Take the Lead
Along with NVIDIA, gains were powered by stocks such as SanDisk (SNDK), Salesforce (CRM), Adobe (ADBE), Micron Technology (MU) and Intel (INTC), all rising more than 4% on Dec. 5, 2025. For the week, leaders include Microchip Technology (MCHP), NXP Semiconductors (NXPI), AppLovin (APP), Salesforce andSynopsys (SNPS), CNBC mentioned.
Semiconductors’ Outlook for 2026
The World Semiconductor Trade Statistics (WSTS) organization increased the 2025 growth outlook and stressed upbeat, continued momentum for the global semiconductor market through 2026, as quoted in an article published on Any Silicon.
For 2026, WSTS forecasts the global semiconductor market to grow more than 25%, reaching $975 billion. Memory and Logic are projected to lead the charge, both increasing by over 30% year over year, the above-mentioned source noted.
PWC too believes that the semiconductor market is projected to reach $0.6 trillion in 2024 at a compound annual growth rate (CAGR) of 8.6%, surpassing $1 trillion by 2030. Among the various sectors, semiconductors for Server and Network are expected to grow the fastest clip, at an annual rate of 11.6%, thanks to the boom in generative AI services.
Software Market’s Outlook for 2026
The global software market size accounted for $823.9 billion in 2025 and is expected to reach around $2,248.33 billion by 2034, at a CAGR of 11.8% from 2025 to 2034, per Precedence Research. The market's expansion will thrive on the integration of AI, the rise of cloud computing, and the growing demand for improved cybersecurity solutions.
Bottom Line
The ETF XLK’s continued rally reflects broad-based strength beyond mega-cap tech, with chipmakers and software stocks driving momentum. With strong growth forecasts for semiconductors and software, these segments are likely to act as key growth engines of the tech sector in 2026.
So, VanEck Semiconductor ETF SMH and State Street SPDR S&P Software & Services ETF XSW can be good plays. SMH sports a Zacks Rank #1 (Strong Buy) while XSW has a Zacks Rank #2 (Buy).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
