The VanEck Vectors Semiconductor ETF (SMH), one of the bellwethers among semiconductor ETFs, is already up more than 45% this year, underscoring the point that chip stocks are in the midst of torrid runs.

However, some market observers believe chip equities can continue soaring over the next couple of years, meaning SMH’s 2019 bullishness could prove to be more of a floor than a ceiling.

“The investor who ran the world’s largest tech fund during the dot-com boom predicts the semiconductor win streak is just beginning,” reports CNBC.Paul Meeks, who came into the year short semis, is now actively putting money to work in the space because he believes the group could surge 20% to 30% within two years.”

SMH holds 25 stocks. Intel Corp. (NASDAQ: INTC) and Taiwan Semiconductor (NYSE: TSM) combine for over 23% of the fund’s weight.

Exploring SMH

Integral to the fortunes of SMH are the performances of growth-ier chip fare, such as Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA). Nvidia accounts for more than 5% of SMH’s roster.

Nvidia “is slated to report earnings on Nov. 14 after the close of U.S. markets. Analysts are expecting earnings per share of $1.24, down from $1.67 a year earlier, so anything in between those two numbers could be a boost to Nvidia stock, as would bullish guidance for the fourth quarter and 2020. Point is, there are catalysts on the horizon that could lift shares of Nvidia even further,” according to InvestorPlace.

“According to Meeks, another major upside catalyst would be an end to the U.S.-China trade war in the coming year,” notes CNBC.

Integral to that thesis is repairing the damaged US/China trade relationship. Previously, President Trump said that the U.S. will eliminate any attachments with Chinese multinational technology company Huawei on Friday as well. The decision to block Huawei was arrived at after China stemmed from buying American agricultural products in retaliation for the president’s unexpected tariffs threat last week. China also permitted its currency to depreciate against the dollar to a key level unseen since 2008, likely in an effort to make Chinese exports cheaper and outperform U.S. products.

For more information on the tech sector, visit our technology category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.