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Intel Q3 Earnings Put These ETFs in Focus

Intel INTC reported Q3 results after market close yesterday. The world’s largest chipmaker smashed estimates for earnings while lagged on revenues.

Q3 Earnings in Focus

Earnings of $1.71 per share came above the Zacks Consensus Estimate of $1.11 and improved from the year-ago earnings of $1.08. Revenues were up 5% year over year at $18.1 billion but were slightly below the estimated $18.2 billion. Though data-centric revenues rose 10%, PC-centric revenues dropped 2% year over year. Internet of Things Group (IOTG) and Mobileye revenues increased 54% and 39%, respectively (see: all the Technology ETFs here).

Intel has been grappling with a chip shortage. Per Reuters, the shortage of ancillary chips needed to make full computers are holding back sales of the company's flagship processor chips. Intel warned that its gross margin and free cash flow would decline to a lower level over the next two to three years as it invests in research and development and builds new chip factories (read: 4 Chip ETFs You Should Not Ignore).

The company plans to shift its business model to become a manufacturer, or foundry, for other chip designers, in addition to continuing to design and manufacture its own processors. But this will take years to come to fruition.

Intel expects revenues of about $18.3 billion and earnings per share of 90 cents for the fourth quarter of 2021. Both the revenue and earnings per share guidance are well below the current Zacks Consensus Estimate of $18.22 billion and $1.02, respectively. For the full year, the company projects revenues of approximately $73.5 billion and earnings per share guidance of $5.28. The Zacks Consensus Estimate is pegged at $73.56 billion for revenues and $4.79 for earnings per share.

Shares of Intel dropped as much as 9% in after market hours on elevated volumes. The stock currently has a Zacks Rank #4 (Sell) and VGM Score of A. It belongs to a top-ranked Zacks industry (placed at the top 12% of 250+ industries).

ETFs to Tap

Given this, ETFs with the highest allocation to the world’s biggest semiconductor maker will be in focus. Investors should closely monitor the movement of these funds and grab the opportunity whenever it arises.

Qraft AI-Enhanced U.S. Next Value ETF NVQ

This fund is actively managed, providing investors with long-term capital appreciation by utilizing a value-investing strategy enhanced by the use of artificial intelligence. It holds 100 stocks in its basket with Intel taking the third spot at 7.8%. Consumer discretionary takes the largest share at 28.8% followed by technology, healthcare and industrials that also receives double-digit exposure each. The ETF has amassed $6.3 million in its asset base since its inception last December and trades in an average daily volume of 2,000 shares. It charges 75 bps in annual fees.

iShares Semiconductor ETF SOXX

This 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 INTC taking the second spot at 8.3% allocation. The fund has amassed $7.6 billion in its asset base and trades in volume of about 790,000 shares a day. The product charges a fee of 43 bps a year from investors and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: What's in Store for Semiconductor ETFs in Q3 Earnings?).

Invesco PHLX Semiconductor ETF SOXQ

This fund tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. Intel occupies the third position with 8.3% share in the basket. SOXQ debuted in the space in June and has accumulated $62.4 million in its asset base. It came up with zero fees and trades in an average daily volume of 24,000 shares.

First Trust NASDAQ Technology Dividend Index Fund TDIV

This fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. The product has amassed $1.7 billion in its asset base while trading in volume of around 50,000 shares per day. It charges 50 bps in annual fees and holds about 93 securities in its basket. Of these firms, Intel takes the second spot, making up for 8.2% of the assets. From a sector look, about one-third of the portfolio is dominated by
semiconductors & semiconductor equipment followed by software, technology hardware, storage & peripherals and diversified telecommunication services.

iShares Edge MSCI USA Value Factor ETF VLUE

This fund offers exposure to large- and mid-cap U.S. stocks with lower valuations based on fundamentals and tracks the MSCI USA Enhanced Value Index. It holds 148 stocks in its basket, with INTC occupying the second position at 6.2% of assets. The ETF has amassed $16.1 billion in its asset base, and charges 15 bps in annual fees. It trades in an average daily volume of 971,000 shares and has a Zacks Rank #2 (Buy) with a Medium risk outlook.

VanEck Vectors Semiconductor ETF SMH

This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. Intel occupies the sixth position with 5.2% of the assets. The product has managed assets worth $6.2 billion and charges 35 bps in annual fees and expenses. It is heavily traded with volume of 3 million shares per day and has a Zacks ETF Rank #1 with a High risk outlook (read: 5 Top-Ranked Chip ETFs to Gain on Ongoing Supply Crisis).


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Intel Corporation (INTC): Free Stock Analysis Report
 
VanEck Semiconductor ETF (SMH): ETF Research Reports
 
iShares Semiconductor ETF (SOXX): ETF Research Reports
 
First Trust NASDAQ Technology Dividend ETF (TDIV): ETF Research Reports
 
iShares MSCI USA Value Factor ETF (VLUE): ETF Research Reports
 
QRAFT AIEnhanced U.S. Next Value ETF (NVQ): ETF Research Reports
 
Invesco PHLX Semiconductor ETF (SOXQ): ETF Research Reports
 
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