The Semiconductor Industry Association (SIA) reported Tuesday that global semiconductor sales jumped 15% on a year-over-year basis, as Regionally, as sales increased in China (27.4%), the Americas (26.3%), and Asia Pacific (11.1%), and only slight declines in other regions.

The report also said March sales declined 0.6% month over month.

The largest exchange-traded fund focused on semiconductor stocks, the VanEck Semiconductor ETF (SMH) , was mostly flat midday. While investors appear cautious ahead of Nvidia’s earnings due later this month, the report’s issuer offered a bright outlook for the rest of the year.

“The market is expected to continue to grow during the remainder of the year, with double-digit annual growth projected for 2024,” said John Neuffer, SIA president and CEO.

Can Semiconductor ETFs Continue to Rise in 2024?

For investors expecting eye-popping sales increases and big earnings beats from Nvidia on a quarterly basis, anything less than extraordinary news may not be enough to push semiconductor stock prices higher, as they may already be priced to perfection.

The average price-earnings ratio for holdings in the SMH ETF is 29, according to Morningstar , while the P/E on the S&P 500 index is just under 25, as reported by Y Charts . For reference, the average historical P/E for the S&P 500 ranges from 15-20.

SMH is up about 10% since its most recent low on April 19 and is now trading around 5% below its all-time high price.

Nvidia Earnings, Price Target in Focus

With Nvidia’s first-quarter earnings results slated for May 22, Goldman Sachs analysts maintained their buy rating on Nvidia stock Tuesday and raised their 12-month target price from $1,000 to $1,100. This price target represents an increase of 20% from Wednesday’s price of $916 and would mark an all-time high for the $2.2 trillion semiconductor company.

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