ETFs concentrating on semiconductors like SMH are expected to see AUM growth from $9B in 2024 to $25B by 2030, according to projections based on rising institutional exposure to tech infrastructure assets. The artificial intelligence (AI) boom will continue to fuel the rally in the sector, with companies investing huge sums in this technology. The expansion of AI applications holds the promise of ushering in fresh opportunities for growth within the sector. According to a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030 (read: Chip ETFs in Focus on New Generation AI Product Launches). The Fed, in its latest meeting, penciled in one rate cut this year and foresees four cuts in 2025. The central bank has altered the language in its statement, noting that there has been “modest further progress toward the committee’s 2% inflation objective.” Previously, the statement pointed to a “lack” of further progress. This signals a period of higher interest rates for a while. Tech titans have shown strong resilience amid such a scenario. And, when the Fed starts cutting rates later this year, technology stocks will receive a boost. As the tech sector relies on borrowing for superior growth, it is cheaper to borrow more money for further initiatives when interest rates are low. The "Magnificent Seven" is the biggest engine of growth for the technology sector and the S&P 500 as a whole. It now accounts for 31% of weightage in the S&P 500. NVIDIA (NVDA) recently topped $3 trillion in market cap and became one of the most valuable companies in the United States. The stock has soared 132.2% so far this year while Meta Platforms (META) and Alphabet (GOOGL) have risen 34.9% and 24%, respectively. Apple (AAPL) reclaimed the most valuable company title this week with a market cap of $3.3 trillion, edging out Microsoft's (MSFT) market cap of $3.2 trillion (read: Apple Jumps on the AI Bandwagon: ETFs to Buy). Further, cutting-edge technologies, including cloud computing, big data, the Internet of Things, wearables, VR headsets, drones, virtual reality, machine learning, digital communication, blockchain and 5G technology, will continue to drive the sector. Meanwhile, worldwide IT spending is expected to increase 8% year over year to $5.06 trillion this year, according to the latest forecast by Gartner. This will put worldwide IT spending on track to surpass $8 trillion well before the end of the decade. Higher spending across software, data center systems, IT services and semiconductors will provide another boost to the sector. Moreover, the tech titans have strong balance sheets, durable revenue streams and robust profit margins, making them attractive investments. They are better positioned to withstand a possible economic downturn and have demonstrated improved cost discipline. As pointed out on EPS, another area where Nvidia is unique is the sheer amount of analyst revisions on the stock. It not only speaks to Nvidia’s dominance in the AI data center to continually surprise the Street, but also to the challenge that analysts face in terms of predicting Nvidia’s persistent revenue surge. Upcoming semiconductor demand spikes from AI, quantum computing, and IoT devices are integral to SMH’s projected trajectory. Analysts suggest that by 2030, over 60% of SMH’s holdings will have redefined their product stacks, boosting overall ETF performance.