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Intel Sinks on Weak Guidance: ETFs in Focus

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Intel (INTC - Free Report) reported better-than-expected Q1 results after market close yesterday. The world’s largest chipmaker smashed estimates for both earnings and revenues but pulled back its full-year guidance, citing significant economic uncertainty caused by the COVID-19 pandemic. Additionally, it forecasts weak earnings for the second quarter.

Q1 Earnings in Focus

Earnings of $1.45 per share came in 17 cents above the Zacks Consensus Estimate and improved 63% from year-ago earnings. Revenues climbed 23% year over year to $19.83 billion and were better than the estimated $18.75 billion. Robust results were driven by strong growth in its data-center business, which is expected to continue to benefit from the pandemic due to rising demand for laptops and cloud-computing power to support remote working (read: ETFs Set to Benefit from Social Distancing, Stay-At-Home).

Intel expects revenues of $18.50 billion and earnings per share of $1.10 for the second quarter of 2020. Though revenue guidance is above the current Zacks Consensus Estimate of $18.19 billion, the earnings forecast falls short of the consensus estimate of $1.25.

Despite the earnings beat, shares of Intel dropped as much as 6% on weak guidance in after-market hours on elevated volume. The stock has a Zacks Rank #3 (Hold) and VGM Score of A. It belongs to an unfavorable Zacks industry (placed at the bottom 40% of 250+ industries).

ETFs to Tap

Given this, ETFs with the highest allocation to the biggest semiconductor company will be in focus. Investors should closely monitor the movement of these funds and grab the opportunity whenever it arises (see: all the Technology ETFs here).

VanEck Vectors Semiconductor ETF (SMH - Free Report)

This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. Intel occupies the second position with 11% of the assets. The product has managed assets worth $1.8 billion and charges 35 bps in annual fees and expenses. It is heavily traded with volume of around 4.7 million shares per day and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.

iShares PHLX Semiconductor ETF (SOXX - Free Report)

This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. firms with INTC taking the second spot with 8.4% allocation. The fund has amassed $2.3 billion in its asset base and trades in volume of about 753,000 shares a day. The product charges a fee of 46 bps a year from investors and has a Zacks ETF Rank #1 with a High risk outlook (read: Chip ETFs May Shine in Q1 Earnings (Revised)).

First Trust Nasdaq Semiconductor ETF (FTXL - Free Report)

This fund offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. Holding 30 stocks in its basket, Intel is the second firm accounting for 8.6% share. FTXL has accumulated $37.8 million in AUM and trades in average daily volume of 22,000 shares. It charges 0.60% in expense ratio and has a Zacks ETF Rank #1.

Invesco Dynamic Semiconductors ETF (PSI - Free Report)

This fund tracks the Dynamic Semiconductor Intellidex Index, holding 29 securities in the basket. Intel occupies the third position and makes up for 5.5% share in the basket. PSI has lower AUM of $212.3 million and sees moderate average daily volume of about 43,000 shares. It charges 58 bps in annual fees and carries a Zacks ETF Rank #1 with a High risk outlook (read: 5 Sector ETFs at the Forefront of Wall Street Rally).

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