Intel Jumps on Q3 Earnings Beat, Upbeat View: ETFs to Buy
Intel INTC posted robust third-quarter 2023 results. The world’s largest chipmaker beat both the top and the bottom lines and provided an upbeat fourth-quarter revenue guidance. This underscores optimism over the company’s growth prospects.
Following the earnings announcement, INTC shares climbed as much as 9% in after-market hours and 8% in pre-market today at the time of writing. Investors seeking to tap the upside should consider ETFs with the highest allocation to the world’s biggest semiconductor player. These include First Trust Nasdaq Semiconductor ETF FTXL, Strive U.S. Semiconductor ETF SHOC, Invesco PHLX Semiconductor ETF SOXQ, iShares Semiconductor ETF SOXX and Invesco Dynamic Semiconductors ETF PSI.
Q3 Earnings in Focus
Intel reported earnings per share of 41 cents, beating the Zacks Consensus Estimate of 21 cents and increasing 11% in the year-ago quarter. Revenues declined 8% year over year to $14.2 billion but came in above the estimated $13.5 billion. The better-than-expected results were driven by a recovery in the personal computers (PC) market.
Client computing, data center and AI, and network and edge revenues declined 3%, 10% and 32%, respectively. Mobileye revenues rose 18% (see: all the Technology ETFs here).
The chipmaker expects a return to sales growth in the fourth quarter for the first time since 2020, fueled by an improving personal computer market and a more competitive product line.
For the current quarter, Intel projects revenues in the range of $14.6 billion to $15.6 billion, while earnings per share are expected to triple to 44 cents. The current Zacks Consensus Estimate is pegged at $14.47 billion for revenues and 21 cents for earnings per share. The solid outlook suggests that the chipmaker has turned a corner after sluggish demand for personal computer chips battered its business. Chief executive officer Pat Gelsinger said that the inventory of PC components is now back to normal levels, prompting customers to resume orders.
ETFs to Tap
First Trust Nasdaq Semiconductor ETF (FTXL)
First Trust Nasdaq Semiconductor ETF offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. FTXL holds 32 stocks in its basket, with Intel taking the top spot at 9.6% share (read: Semiconductor ETFs in Focus Ahead of Q3 Earnings).
First Trust Nasdaq Semiconductor ETF has $1 billion in AUM. The average trading volume is light at around 49,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1 (Strong Buy).
Strive U.S. Semiconductor ETF (SHOC)
Strive U.S. Semiconductor ETF seeks broad market exposure to the U.S. semiconductor sector. It follows the Solactive United States Semiconductors 30 Capped Index and holds 31 stocks in its basket, with Intel taking the top spot at 8.6% of assets.
Strive U.S. Semiconductor ETF has AUM of $33.5 million and charges 40 bps in annual fees. It trades in a volume of 7,000 shares per day on average and has a Zacks ETF Rank #2 (Buy).
Invesco PHLX Semiconductor ETF (SOXQ)
Invesco PHLX Semiconductor ETF offers exposure to companies engaged in the semiconductor business. It tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. Of these firms, Intel occupies the top position with an 8.5% share.
Invesco PHLX Semiconductor ETF has accumulated $138.8 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 47,000 shares. SOXQ has a Zacks ETF Rank #1.
iShares Semiconductor ETF (SOXX)
iShares Semiconductor ETF follows the ICE Semiconductor Index and offers exposure to U.S. companies that design, manufacture and distribute semiconductors. It holds 30 securities in its basket, with Intel occupying the fourth position at 6.6% of assets.
iShares Semiconductor ETF has amassed $7.9 billion in its asset base and trades in a volume of about 822,000 shares a day. The product charges a fee of 35 bps a year from investors and has a Zacks ETF Rank #1 with a High risk outlook.
Invesco Dynamic Semiconductors ETF (PSI)
Invesco Dynamic Semiconductors ETF tracks the Dynamic Semiconductor Intellidex Index, holding 31 securities in its basket. Intel is the second firm, accounting for 5.6% of the assets (read: Should You Play Undervalued Tech ETFs?).
Invesco Dynamic Semiconductors ETF has AUM of $553.5 million and sees a moderate average daily volume of 822,000 shares. Expense ratio is 0.57%. PSI has a Zacks ETF Rank #1 with a High risk outlook.
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Intel Corporation (INTC) : Free Stock Analysis Report
Invesco Semiconductors ETF (PSI): ETF Research Reports
iShares Semiconductor ETF (SOXX): ETF Research Reports
First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
Invesco PHLX Semiconductor ETF (SOXQ): ETF Research Reports
Strive U.S. Semiconductor ETF (SHOC): ETF Research Reports
