After logging one of the worst weeks for semiconductor stocks in 2024, AI ETFs started a new week with healthy gains as optimism about Nvidia returned, and investors felt a Trump presidency was less assured.

The largest AI exchange-traded fund with Nvidia as a top holding, the VanEck Semiconductor ETF (SMH) , rose nearly 4% on the renewed optimism.

Excitement around Nvidia comes as its promising Blackwell architecture for generative AI returned to focus and President Biden’s exit from the November election neutralized former president Trump’s questioning U.S. support for Taiwan last week.

NVDA rose nearly 5% and TSM gained more than 2% in Monday trading.

AI ETFs and Nvidia’s Blackwell

The incredible rise of AI ETFs has largely been supported by the dominance of Nvidia stock, the top holding in many of these mega-cap tech funds. Nvidia’s gains have been driven by its ability to beat earnings forecasts. Nvidia's Blackwell release date is expected in late 2024 to early 2025, and excitement over the “ new era ” GPU architecture is expected by many analysts to be transformative for artificial intelligence.

Here's a breakdown of what Blackwell brings to the table:

Investors are banking that the Blackwell architecture will represent a significant leap in AI processing capabilities that can improve different fields, including natural language processing, computer vision and robotic automation. How this affects price remains uncertain.