Semiconductor ETFs Look Well Poised Post Q4 Earnings
The semiconductor sector is performing well this year, driven by the expansion of artificial intelligence (AI) applications, which are ushering in fresh opportunities for growth within the sector. Additionally, a spate of strong earnings reports from well-known players in the space has instilled confidence in the sector.
As such, VanEck Vectors Semiconductor ETF SMH, iShares Semiconductor ETF SOXX, Invesco PHLX Semiconductor ETF SOXQ and First Trust NASDAQ Semiconductor ETF FTXL have gained 12.4%, 5.3%, 5.8% and 0.6%, respectively, year-to-date (read: Tech Leads S&P 500 to Highs: Does Further Rally Await ETFs?).
Let’s dig into the individual earnings releases:
Semiconductor Earnings in Focus
Intel INTC, the world’s largest chipmaker, beat on both the top and the bottom lines but provided a dismal first-quarter 2024 revenue guidance. It reported earnings per share of 54 cents, which beat the Zacks Consensus Estimate by 10 cents and came in higher than the year-ago earnings of 15 cents. Revenues grew 8% year over year to $15.41 billion and came in above the estimated $15.14 billion. For the current quarter, Intel projects revenues in the range of $12.2 billion to $13.20 billion, while earnings per share are expected to be 13 cents (read: Intel Falls On Weak Outlook: Buy the Dip With Chip ETFs?).
Texas Instruments TXN reported mixed fourth-quarter 2023 results. Earnings beat the Zacks Consensus Estimate by 2 cents but revenues lagged the same by $37 million. For first-quarter 2024, the company expects revenues in the range of $3.45-$3.75 billion and earnings per share in the band of 96 cents-$1.16.
Lam Research LRCX topped revenue and earnings estimates for second-quarter fiscal 2024. Earnings per share of $7.52 surpassed the Zacks Consensus Estimate by 46 cents, while revenues of $3.76 billion edged past the estimated $3.71 billion. For third-quarter fiscal 2024, the company expects revenues of $3.7 billion (+/- $300 million) and earnings per share of $7.25 (+/- 75 cents).
Advanced Micro Devices’ AMD revenues beat estimates while earnings matched the same. It reported earnings of 77 cents per share, on par with the Zacks Consensus Estimate, and revenues of $6.17 billion, which beat the consensus mark by $54 million. AMD expects first-quarter 2024 revenues of $5.4 billion (+/-$300 million).
At Qualcomm QCOM, earnings per share of $2.75 for first-quarter fiscal 2024 surpassed the Zacks Consensus Estimate by 37 cents. Revenues of $9.9 billion edged past the estimate of $9.5 billion. The company projects revenues of $8.9-$9.7 billion and earnings per share in the range of $2.20-$2.40 for the second quarter of fiscal 2024.
ETFs in Focus
VanEck Vectors Semiconductor ETF (SMH)
VanEck Vectors Semiconductor ETF provides exposure to 26 companies involved in semiconductor production and equipment by tracking the MVIS US Listed Semiconductor 25 Index. It has managed assets worth $13.5 billion and charges 35 bps in annual fees and expenses. The in-focus five firms account for 21.8% share in the basket.
VanEck Vectors Semiconductor ETF is heavily traded, with a volume of around 7.4 million shares per day. It has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
iShares Semiconductor ETF (SOXX)
iShares Semiconductor ETF follows the NYSE Semiconductor Index and offers exposure to U.S. companies that design, manufacture and distribute semiconductors. It holds 30 securities in its basket, with the in-focus five firms collectively making up 28% of the assets.
iShares Semiconductor ETF has amassed $11.2 billion in its asset base and trades in a volume of about 820,000 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 (read: Top Thematic ETF Ideas for 2024: AI & More).
Invesco PHLX Semiconductor ETF (SOXQ)
Invesco PHLX Semiconductor ETF tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. The in-focus five firms collectively make up a combined 31.4% share in the basket.
Invesco PHLX Semiconductor ETF has accumulated $231 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 50,000 shares. SOXQ FTXL has a Zacks ETF Rank #1.
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 in-focus five firms accounting for a combined 33.8% share.
First Trust Nasdaq Semiconductor ETF has accumulated $1.3 billion in AUM. The average trading volume is light at around 62,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1.
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Intel Corporation (INTC) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Lam Research Corporation (LRCX) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): 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
