Vanguard ETF Loaded With Nvidia and Broadcom Aims for $1,000 Share Price

The Vanguard Information Technology ETF (VGT) has delivered impressive returns over the past decade, with an annualized return of 24%. If it maintains this pace over the next 10 years, its price could grow from around $120 a share to more than $1,000 per share by 2036.

The fund's performance is largely driven by its heavy allocation to AI semiconductor giants Nvidia and Broadcom. These companies have delivered eye-popping annualized returns of 35.5% and 63.8%, respectively, over the past decade. Nvidia is the fund's top holding, with a significant 17.2% allocation.

Analysts believe that we are still in the early stages of the AI infrastructure build-out, which could lead to continued robust growth for these companies. Global semiconductor sales are expected to more than double from $975 billion this year to $2 trillion by 2036, according to a Deloitte outlook.

However, there are risks associated with investing in VGT, including growing competition in the AI semiconductor space and potential slower spending if AI does not deliver on its promise.