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Semiconductor ETFs Shining Amid Mixed Numbers in Q4 Earnings
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The semiconductor space has been surging over the past three months on improving demand from chips suppliers, data centers, PC manufacturers, and mobile phone producers, as well as reopening in China. However, mixed quarterly results from well-known players slowed down the rally in the sector lately (read: Is the Worst Over for Semiconductor Stocks & ETFs?).
While Intel (INTC - Free Report) and Qualcomm (QCOM - Free Report) disappointed investors, Texas Instruments (TXN - Free Report) , Lam Research Corporation (LRCX - Free Report) and Advanced Micro Devices (AMD - Free Report) came up with solid earnings reports. As such, semiconductor ETFs remained strong over the past month with VanEck Vectors Semiconductor ETF (SMH - Free Report) , iShares Semiconductor ETF (SOXX - Free Report) , Invesco PHLX Semiconductor ETF (SOXQ - Free Report) , Invesco Dynamic Semiconductors ETF (PSI - Free Report) and First Trust NASDAQ Semiconductor ETF (FTXL - Free Report) rising 12.8%, 12.7%, 12.4%, 10.4% and 8.7%, respectively.
Let’s dig into the individual performances:
Semiconductor Earnings in Focus
Intel, the world’s largest chipmaker, missed estimates for both earnings and revenues and offered a weak outlook for 2023, citing cooling demand for its chips used in personal computers. Earnings of 10 cents per share came much below the Zacks Consensus Estimate of 20 cents and revenues of $14 billion also came in below the estimated $14.5 billion. Intel projects another big revenue decline for the current quarter, along with deeper-than-expected losses. Revenues are expected in the range of $10.5 billion to $11.5 billion, while loss will likely be about 15 cents per share (read: Intel Plunges on Earnings Miss, Weak Guidance: ETFs in Focus).
Texas Instruments reported solid Q4 results topping our earnings estimate by 17 cents and revenue estimate by $84 million. For first-quarter 2023, the company expects revenues in the range of $4.17-$4.53 billion and earnings per share of $1.64-$1.90.
Lam Research also topped on both revenue and earnings for second-quarter fiscal 2023. Earnings per share of $10.71 strongly surpassed the Zacks Consensus Estimate by 76 cents, while revenues of $5.28 billion edged past the estimated $5.08 billion. For third-quarter fiscal 2023, the company expects revenues of $3.8 billion (+/- $300 million) and earnings per share of $6.50 (+/- 75 cents).
Advanced Micro Devices beat the Zacks Consensus Estimate on earnings by three cents and on revenues by $58 million. It expects first-quarter 2023 revenues of $5.3 billion (+/-$300 million), which indicates a year-over-year decline of 10%.
At Qualcomm, earnings per share of $2.37 for first-quarter fiscal 2023 surpassed the Zacks Consensus Estimate by a couple of cents, while revenues of $9.46 billion fell short of the estimate of $9.56 billion. The company projects revenues of $8.7-$9.5 billion and earnings per share of $2.05-$2.25 for the second quarter of fiscal 2023.
VanEck Vectors Semiconductor ETF provides exposure to 25 companies involved in semiconductor production and equipment by tracking the MVIS US Listed Semiconductor 25 Index. It has managed assets worth $7.7 billion and charges 35 bps in annual fees and expenses. The in-focus five firms account for 23.2% share in the basket.
VanEck Vectors Semiconductor ETF is heavily traded with a volume of around 3.7 million shares per day and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
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 the in-focus five firms making up for 26.6% of assets.
iShares Semiconductor ETF has amassed $7.4 billion in its asset base and trades in a volume of about 1.1 million shares a day. The product charges a fee of 35 bps a year from investors and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: U.S.-China Aerial Conflict Intensifies: ETF Areas in Tight Spot).
Invesco PHLX Semiconductor ETF tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. The in-focus five firms collectively make up for a combined 30.4% share in the basket.
Invesco PHLX Semiconductor ETF has accumulated $101.7 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 70,000 shares.
Invesco Dynamic Semiconductors ETF tracks the Dynamic Semiconductor Intellidex Index, holding 31 securities in its basket. The in-focus five firms account for 20.9% share in the basket.
Invesco Dynamic Semiconductors ETF has AUM of $569.1 million and sees a moderate average daily volume of 25,000 shares. The \eExpense ratio is 0.55%. PSI has a Zacks ETF Rank #1 with a High risk outlook.
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 30 stocks in its basket, with in-focus five firms accounting for a combined 23.1% share.
First Trust Nasdaq Semiconductor ETF has accumulated $87.1 million in AUM. The average trading volume is light at around 10,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #2.
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Semiconductor ETFs Shining Amid Mixed Numbers in Q4 Earnings
The semiconductor space has been surging over the past three months on improving demand from chips suppliers, data centers, PC manufacturers, and mobile phone producers, as well as reopening in China. However, mixed quarterly results from well-known players slowed down the rally in the sector lately (read: Is the Worst Over for Semiconductor Stocks & ETFs?).
While Intel (INTC - Free Report) and Qualcomm (QCOM - Free Report) disappointed investors, Texas Instruments (TXN - Free Report) , Lam Research Corporation (LRCX - Free Report) and Advanced Micro Devices (AMD - Free Report) came up with solid earnings reports. As such, semiconductor ETFs remained strong over the past month with VanEck Vectors Semiconductor ETF (SMH - Free Report) , iShares Semiconductor ETF (SOXX - Free Report) , Invesco PHLX Semiconductor ETF (SOXQ - Free Report) , Invesco Dynamic Semiconductors ETF (PSI - Free Report) and First Trust NASDAQ Semiconductor ETF (FTXL - Free Report) rising 12.8%, 12.7%, 12.4%, 10.4% and 8.7%, respectively.
Let’s dig into the individual performances:
Semiconductor Earnings in Focus
Intel, the world’s largest chipmaker, missed estimates for both earnings and revenues and offered a weak outlook for 2023, citing cooling demand for its chips used in personal computers. Earnings of 10 cents per share came much below the Zacks Consensus Estimate of 20 cents and revenues of $14 billion also came in below the estimated $14.5 billion. Intel projects another big revenue decline for the current quarter, along with deeper-than-expected losses. Revenues are expected in the range of $10.5 billion to $11.5 billion, while loss will likely be about 15 cents per share (read: Intel Plunges on Earnings Miss, Weak Guidance: ETFs in Focus).
Texas Instruments reported solid Q4 results topping our earnings estimate by 17 cents and revenue estimate by $84 million. For first-quarter 2023, the company expects revenues in the range of $4.17-$4.53 billion and earnings per share of $1.64-$1.90.
Lam Research also topped on both revenue and earnings for second-quarter fiscal 2023. Earnings per share of $10.71 strongly surpassed the Zacks Consensus Estimate by 76 cents, while revenues of $5.28 billion edged past the estimated $5.08 billion. For third-quarter fiscal 2023, the company expects revenues of $3.8 billion (+/- $300 million) and earnings per share of $6.50 (+/- 75 cents).
Advanced Micro Devices beat the Zacks Consensus Estimate on earnings by three cents and on revenues by $58 million. It expects first-quarter 2023 revenues of $5.3 billion (+/-$300 million), which indicates a year-over-year decline of 10%.
At Qualcomm, earnings per share of $2.37 for first-quarter fiscal 2023 surpassed the Zacks Consensus Estimate by a couple of cents, while revenues of $9.46 billion fell short of the estimate of $9.56 billion. The company projects revenues of $8.7-$9.5 billion and earnings per share of $2.05-$2.25 for the second quarter of fiscal 2023.
ETFs in Focus
VanEck Vectors Semiconductor ETF (SMH - Free Report)
VanEck Vectors Semiconductor ETF provides exposure to 25 companies involved in semiconductor production and equipment by tracking the MVIS US Listed Semiconductor 25 Index. It has managed assets worth $7.7 billion and charges 35 bps in annual fees and expenses. The in-focus five firms account for 23.2% share in the basket.
VanEck Vectors Semiconductor ETF is heavily traded with a volume of around 3.7 million shares per day and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
iShares Semiconductor ETF (SOXX - Free Report)
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 the in-focus five firms making up for 26.6% of assets.
iShares Semiconductor ETF has amassed $7.4 billion in its asset base and trades in a volume of about 1.1 million shares a day. The product charges a fee of 35 bps a year from investors and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: U.S.-China Aerial Conflict Intensifies: ETF Areas in Tight Spot).
Invesco PHLX Semiconductor ETF (SOXQ - Free Report)
Invesco PHLX Semiconductor ETF tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. The in-focus five firms collectively make up for a combined 30.4% share in the basket.
Invesco PHLX Semiconductor ETF has accumulated $101.7 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 70,000 shares.
Invesco Dynamic Semiconductors ETF (PSI - Free Report)
Invesco Dynamic Semiconductors ETF tracks the Dynamic Semiconductor Intellidex Index, holding 31 securities in its basket. The in-focus five firms account for 20.9% share in the basket.
Invesco Dynamic Semiconductors ETF has AUM of $569.1 million and sees a moderate average daily volume of 25,000 shares. The \eExpense ratio is 0.55%. PSI has a Zacks ETF Rank #1 with a High risk outlook.
First Trust Nasdaq Semiconductor ETF (FTXL - Free Report)
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 30 stocks in its basket, with in-focus five firms accounting for a combined 23.1% share.
First Trust Nasdaq Semiconductor ETF has accumulated $87.1 million in AUM. The average trading volume is light at around 10,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #2.