Investments

 

ETF	1-Year Return	5-Year Annualized Return	10-Year Annualized Return	YTD 2025 Return	Expense Ratio
QQQ	+12–16%123	~18%42	~18%43	~9%3	0.20%3
SMH	+38%1	~28–37%143	~28%43	~18%3	0.35%3

•  tracks the Nasdaq-100, offering wide tech exposure.

•  is focused on semiconductor companies (NVIDIA, TSMC, Broadcom, etc.), benefiting from high sector growth.

• Outperformed QQQ in all recent periods: 1-year, 5-year, and 10-year annualized returns are significantly higher.

• : Semiconductor demand is expected to remain strong thanks to artificial intelligence, cloud computing, 5G, and automotive applications15.

• : Companies like NVIDIA and TSMC, which are at the heart of current tech innovations and manufacturing.

• : The consensus expects continued robust growth in 2025, with SMH even projected to potentially rise 36% or more within the year56.

• Well-diversified tech/large-cap ETF: Contains mature tech giants (Apple, Microsoft, Google), which can provide some cushion during volatility.

• : Still strong, with most constituent companies posting better-than-expected growth and earnings, though not at SMH’s level789.

• : Analysts see 8–15% further upside this year under normal conditions, assuming stability in the economy810.

• :

  • SMH offers higher return potential but with more concentrated sector risk (heavily reliant on semiconductors and a few stocks such as NVIDIA). Historically, this means more volatility543.

  • QQQ is more diversified, providing somewhat lower risk and steadier—though slower—growth723.

• : Slightly higher for SMH (0.35%) versus QQQ (0.20%) but not a major factor for growth-focused investors3.

ETF	Growth Potential	Risk Level	2025 Analyst Sentiment
SMH	Highest	Higher (sector)	Strongly Bullish156
QQQ	Strong	Moderate (divers.)	Positive7810

For maximum growth potential in 2025, SMH currently offers the greatest upside, supported by decades-high returns, analyst bullishness, and formidable industry tailwinds from AI and global chip demand156. However, expect higher volatility compared to QQQ. If you are seeking high growth and can tolerate sector risk, SMH is the stronger choice. If you prefer more stability with still-robust growth, QQQ remains an excellent, lower-risk alternative438.

Always consider your risk tolerance and investment timeline before making a decision.

1. https://www.ainvest.com/news/tech-etf-invest-2-000-smh-beats-qqq-ai-era-2506/
2. https://www.schwab.wallst.com/prospect/research/etfs/performance.asp
3. https://portfolioslab.com/tools/stock-comparison/QQQ/SMH
4. https://portfolioslab.com/tools/stock-comparison/SMH/QQQ
5. https://www.markets.com/research/smh-stock-price-prediction-2025-what-is-the-future-of-smh-stock
6. https://stockscan.io/stocks/SMH/forecast
7. https://www.invesco.com/qqq-etf/en/etf-insights/qqq-quarterly-outlook.html
8. https://www.markets.com/research/invesco-qqq-stock-overview-where-will-qqq-go-in-2025
9. https://www.cnbc.com/2025/06/17/the-tech-heavy-qqq-is-near-a-new-record-these-stocks-might-get-it-there.html
10. https://www.tipranks.com/news/qqq-etf-news-7-3-2025
11. https://www.etftrends.com/tactical-allocation-channel/fabless-chip-stocks-fantastic-2025/
12. https://www.vaneck.com/us/en/blogs/thematic-investing/2025-semiconductor-outlook-investor-roadmap/
13. https://www.schwab.com/research/etfs/quotes/summary/qqq.o/1000
14. https://www.invesco.com/qqq-etf/en/performance.html
15. https://www.vaneck.com/us/en/investments/semiconductor-etf-smh/
16. https://www.markets.com/research/trending-et-fs-2025-invesco-qqq-etf-smh-etf-voo-etf-igv-etf
17. https://seekingalpha.com/article/4774086-smh-vs-qqqm-time-for-a-more-concentrated-tech-bet-with-smh
18. https://money.usnews.com/investing/articles/best-semiconductor-etfs-to-buy
19. https://etfdb.com/tool/etf-comparison/QQQ-SMH/
20. https://www.finextra.com/blogposting/28477/market-analysis-spy-qqq-iwm-dia-performance-and-outlook-for-2025