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Intel Tanks on Big Q2 Earnings Miss: ETFs in Focus
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Intel (INTC - Free Report) disappointed investors as it reported lackluster second-quarter 2024 results. The world’s largest chipmaker missed estimates on both earnings and revenues and guided a loss for the third quarter. It plans to lay off 15% of its workforce as part of a $10 billion cost-savings plan and suspended quarterly dividend payments.
Intel shares tumbled more than 22% in pre-market trade at the time of writing, indicating that the stock is set to erase nearly $25 billion in market value in today's trading session, which would be its worst selloff since 2000 (read: Tough Time Ahead of Nasdaq & Semiconductor ETFs?).
Investors should keep a close eye on the ETFs having the highest allocation to the world’s biggest semiconductor player and tap the opportunity when it rises. These include First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , iShares Edge MSCI USA Value Factor ETF (VLUE - Free Report) , Strive U.S. Semiconductor ETF (SHOC - Free Report) and Invesco AI and Next Gen Software ETF (IGPT - Free Report) .
Q2 Earnings in Focus
Intel reported earnings per share of 2 cents, which missed the Zacks Consensus Estimate of 10 cents and declined from the year-ago earnings of 13 cents. Revenues dipped 1% year over year to $12.8 billion and fell short of the estimated $12.9 billion.
Client computing revenues increased 9% while data center and AI revenues, and network and edge revenues declined 3% and 1%, respectively. Intel Foundry revenues grew 4% (see: all the Technology ETFs here).
The chipmaker is in the midst of a turnaround plan, focused on developing advanced AI processors and third-party foundry businesses, as it aims to recoup the technological edge it lost to Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest contract chipmaker, and regain market share lost to rival AMD (AMD).
For the current quarter, Intel guided an adjusted loss of 3 cents per share on revenues of $12.5-$13.5 billion. The current Zacks Consensus Estimate is pegged at $14.3 billion for revenues and 29 cents for earnings per share.
Intel is implementing a comprehensive reduction in spending, including a headcount cut of more than 15%. It also suspended its dividend starting in the fourth quarter.
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 31 stocks in its basket, with Intel taking the fifth spot at 5.3% share.
First Trust Nasdaq Semiconductor ETF has $1.5 billion in AUM. The average trading volume is light at around 33,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1 (Strong Buy).
VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It follows the MVIS US Listed Semiconductor 25 Index, which tracks the most liquid companies in the industry based on market capitalization and trading volume. VanEck Vectors Semiconductor ETF holds 26 stocks in its basket, with Intel occupying the seventh position at 4.6%.
VanEck Vectors Semiconductor ETF has managed assets worth $21 billion and charges 35 bps in annual fees and expenses. SMH trades in an average daily volume of 8 million shares and has a Zacks ETF Rank #1 with a High risk outlook (read: Beyond AI, Semiconductor ETFs Have Another Reason to Rally).
iShares Edge MSCI USA Value Factor ETF 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 149 stocks in its basket, with Intel occupying the third position at 4.6% of the assets. Information technology takes the largest share at 29.6%, while financials, healthcare and consumer discretionary round off the next three with double-digit exposure each.
iShares Edge MSCI USA Value Factor ETF has amassed $7 billion in its asset base and charges 15 bps in annual fees. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium.
Strive U.S. Semiconductor ETF seeks broad market exposure to the U.S. semiconductor sector. It follows the Bloomberg US Listed Semiconductors Select Total Return Index and holds 32 stocks in its basket, with Intel making up for the sixth position at 4.3% of the assets.
Strive U.S. Semiconductor ETF has AUM of $83.2 million and charges 40 bps in annual fees. It trades in a volume of 42,000 shares per day on average and has a Zacks ETF Rank #2.
Invesco AI and Next Gen Software ETF offers exposure to companies with significant exposure to technologies or products that contribute to future software development through direct revenue. It holds 99 stocks in its basket, with Intel taking the eighth position at 4.4% share.
Invesco AI and Next Gen Software ETF has amassed $372.8 million in its asset base and trades in an average daily volume of 80,000. It charges 60 bps in fees per year from investors and has a Zacks ETF Rank #1.
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Intel Tanks on Big Q2 Earnings Miss: ETFs in Focus
Intel (INTC - Free Report) disappointed investors as it reported lackluster second-quarter 2024 results. The world’s largest chipmaker missed estimates on both earnings and revenues and guided a loss for the third quarter. It plans to lay off 15% of its workforce as part of a $10 billion cost-savings plan and suspended quarterly dividend payments.
Intel shares tumbled more than 22% in pre-market trade at the time of writing, indicating that the stock is set to erase nearly $25 billion in market value in today's trading session, which would be its worst selloff since 2000 (read: Tough Time Ahead of Nasdaq & Semiconductor ETFs?).
Investors should keep a close eye on the ETFs having the highest allocation to the world’s biggest semiconductor player and tap the opportunity when it rises. These include First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) , VanEck Vectors Semiconductor ETF (SMH - Free Report) , iShares Edge MSCI USA Value Factor ETF (VLUE - Free Report) , Strive U.S. Semiconductor ETF (SHOC - Free Report) and Invesco AI and Next Gen Software ETF (IGPT - Free Report) .
Q2 Earnings in Focus
Intel reported earnings per share of 2 cents, which missed the Zacks Consensus Estimate of 10 cents and declined from the year-ago earnings of 13 cents. Revenues dipped 1% year over year to $12.8 billion and fell short of the estimated $12.9 billion.
Client computing revenues increased 9% while data center and AI revenues, and network and edge revenues declined 3% and 1%, respectively. Intel Foundry revenues grew 4% (see: all the Technology ETFs here).
The chipmaker is in the midst of a turnaround plan, focused on developing advanced AI processors and third-party foundry businesses, as it aims to recoup the technological edge it lost to Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest contract chipmaker, and regain market share lost to rival AMD (AMD).
For the current quarter, Intel guided an adjusted loss of 3 cents per share on revenues of $12.5-$13.5 billion. The current Zacks Consensus Estimate is pegged at $14.3 billion for revenues and 29 cents for earnings per share.
Intel is implementing a comprehensive reduction in spending, including a headcount cut of more than 15%. It also suspended its dividend starting in the fourth quarter.
ETFs in Focus
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 31 stocks in its basket, with Intel taking the fifth spot at 5.3% share.
First Trust Nasdaq Semiconductor ETF has $1.5 billion in AUM. The average trading volume is light at around 33,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1 (Strong Buy).
VanEck Vectors Semiconductor ETF (SMH - Free Report)
VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It follows the MVIS US Listed Semiconductor 25 Index, which tracks the most liquid companies in the industry based on market capitalization and trading volume. VanEck Vectors Semiconductor ETF holds 26 stocks in its basket, with Intel occupying the seventh position at 4.6%.
VanEck Vectors Semiconductor ETF has managed assets worth $21 billion and charges 35 bps in annual fees and expenses. SMH trades in an average daily volume of 8 million shares and has a Zacks ETF Rank #1 with a High risk outlook (read: Beyond AI, Semiconductor ETFs Have Another Reason to Rally).
iShares Edge MSCI USA Value Factor ETF (VLUE - Free Report)
iShares Edge MSCI USA Value Factor ETF 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 149 stocks in its basket, with Intel occupying the third position at 4.6% of the assets. Information technology takes the largest share at 29.6%, while financials, healthcare and consumer discretionary round off the next three with double-digit exposure each.
iShares Edge MSCI USA Value Factor ETF has amassed $7 billion in its asset base and charges 15 bps in annual fees. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium.
Strive U.S. Semiconductor ETF (SHOC - Free Report)
Strive U.S. Semiconductor ETF seeks broad market exposure to the U.S. semiconductor sector. It follows the Bloomberg US Listed Semiconductors Select Total Return Index and holds 32 stocks in its basket, with Intel making up for the sixth position at 4.3% of the assets.
Strive U.S. Semiconductor ETF has AUM of $83.2 million and charges 40 bps in annual fees. It trades in a volume of 42,000 shares per day on average and has a Zacks ETF Rank #2.
Invesco AI and Next Gen Software ETF (IGPT - Free Report)
Invesco AI and Next Gen Software ETF offers exposure to companies with significant exposure to technologies or products that contribute to future software development through direct revenue. It holds 99 stocks in its basket, with Intel taking the eighth position at 4.4% share.
Invesco AI and Next Gen Software ETF has amassed $372.8 million in its asset base and trades in an average daily volume of 80,000. It charges 60 bps in fees per year from investors and has a Zacks ETF Rank #1.