3 Best Technology ETFs with More Than 25% Upside Potential

Investors keen on capitalizing on secular growth prospects in the technology sector, including artificial intelligence (AI), cloud computing, quantum computing, blockchain, semiconductors, and cybersecurity, can consider adding technology exchange-traded funds (ETFs) to their portfolios. These ETFs provide the benefits of diversification and lower costs.

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Here, we will look at three technology ETFs – VanEck Semiconductor ETF SMH -3.77% ▼ , iShares U.S. Technology ETF IYW -1.18% ▼ , and First Trust NASDAQ-100 Technology Sector Index Fund QTEC -1.85% ▼ – that are assigned a Strong Buy rating and have more than 25% upside potential.

Using TipRanks’ Stock Comparison Tool, let’s see how these ETFs stack against each other.

VanEck Semiconductor ETF (SMH)

The SMH ETF tracks the MVIS U.S. Listed Semiconductor 25 Index and offers exposure to the 25 largest U.S.-listed companies producing semiconductors or semiconductor equipment. It has gained 82% over the past year, thanks to robust demand for chips amid the ongoing AI wave.

According to TipRanks’ unique ETF analyst consensus, determined based on a weighted average of analyst ratings on its holdings, SMH scores a Strong Buy rating. The average price target of $497.50 for the SMH ETF implies about 27.2% upside potential.

Currently, the top three holdings of the SMH ETF are Nvidia NVDA -1.33% ▼ , Taiwan Semiconductor Manufacturing Company TSM -4.33% ▼ , and Broadcom AVGO -1.56% ▼ .

iShares U.S. Technology ETF (IYW)

The IYW ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index and offers exposure to U.S. electronics, computer software and hardware, and information technology (IT) companies.

Based on a weighted average of analyst ratings on its holdings, IYW scores a Strong Buy rating. The average price target of $251.05 for the IYW ETF implies about 33% upside potential.

Currently, the top three holdings of the IYW ETF are Nvidia, Apple AAPL -0.37% ▼ , and Microsoft MSFT +1.35% ▲ .

First Trust NASDAQ-100 Technology Sector Index Fund (QTEC)

The QTEC ETF tracks the NASDAQ-100 Technology Sector Index and offers exposure to tech giants and emerging innovative companies that are shaping the world’s digital landscape.

Based on a weighted average of analyst ratings on its holdings, QTEC scores a Strong Buy rating. The average price target of $292.31 for the QTEC ETF implies about 33% upside potential.

Currently, the top three holdings of the QTEC ETF are Micron Technology MU -7.99% ▼ , Western Digital WDC -7.21% ▼ , and Applied Materials AMAT -5.60% ▼ .

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