The Zacks Analyst Blog Highlights : XSD, QQQ, SOXX, FTXL, and PSI
For Immediate Release
Chicago, IL – March 14, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include SPDR S&P Semiconductor ETF XSD, Invesco QQQ QQQ, iShares Semiconductor ETF SOXX, First Trust Nasdaq Semiconductor ETF FTXL and Invesco Dynamic Semiconductors ETF PSI
Here are highlights from Friday’s Analyst Blog:
Time to Tap Semiconductor ETFs on Beaten-Down Valuations?
Stocks have been in a tight spot lately due to the uncertainty emanating from the Russia-Ukraine war. However, this has opened up a great buying opportunity for some beaten down zones that offer strong long-term potential. Semiconductor is one such area. Let's delve a little deeper.
Factors That Could Be Fueling Chip Demand Further
Semiconductor stocks are well-positioned to take advantage of the global push for building a green economy. Electric vehicle demand is heating up. Per IEA, sales of electric cars touched 6.6 million in 2021, more than tripling their market share from two years earlier.
The automotive sector has specifically advanced to include more electronic components in vehicles that rely on chips. Auto sales are poised to rebound in the near term thanks to the ebbing pandemic and growing vaccination. This has resulted in a sharp demand for chips, in fact, supply shortages.
Biden's Executive Order to Regulate Cryptocurrency
President Biden has signed an executive order that will coordinate efforts among financial regulators to study the risks and opportunities associated with digital assets. Bitcoin, one of the world's most popular cryptocurrencies, jumped 9% on Wednesday having reacted to the news, according to Coin Metrics (read: Will Biden's Executive Order Put Crypto ETFs in Bright Spot?).
The recent rally in cryptocurrencies like bitcoin prices is a plus for semiconductor stocks. This is because mining of cryptocurrencies needs the usage of semiconductors. A hardware known as an ASIC (Application-Specific Integrated Circuit) is designed explicitly for mining bitcoin.
Global Rollout of 5G
The rollout of 5G globally has been gaining momentum. By 2025, 5G networks are likely to cover one-third of the world's population, per an article on GSMA.com. The accelerating speed of digitization in various corners like healthcare, transport, financial systems, defense, agriculture and retail has been making the future bright for semiconductors.
Increased Smartphone Sales
Robust recovery in smartphone sales is spurring demand for semiconductors. Global smartphone market grew [a moderate] 6% year over year in 2021, per Gartner. While the first half was upbeat, sales fell in the second half due to component crunch. "Out-of-stock situations for popular models and limited inventories pushed out some of the possible sales to 2022," per Anshul Gupta, senior research director at Gartner.
Still-Compelling Valuation
SPDR S&P Semiconductor ETF is down 3% past week versus 2.4% losses in the S&P 500 and a 3% decline in the Nasdaq Composite. Even after such a performance, XSD (P/E 22.78X) is cheaper than the Nasdaq 100 ETF Invesco QQQ which has a P/E of 31.53X. The S&P 500 has a P/E of 24.21X.
Other semiconductor ETFs like iShares Semiconductor ETF, First Trust Nasdaq Semiconductor ETF, and Invesco Dynamic Semiconductors ETF have a P/E of 32.73X, 24.56X and 28.07X, respectively.
Want key ETF info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Invesco QQQ (QQQ): ETF Research Reports
Invesco Dynamic Semiconductors ETF (PSI): ETF Research Reports
iShares Semiconductor ETF (SOXX): ETF Research Reports
SPDR S&P Semiconductor ETF (XSD): ETF Research Reports
First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
