Chip ETFs To Surge On Intel's Solid Q4 Earnings, Upbeat View

Intel (NASDAQ:INTC) reported stellar Q4 results after market close yesterday. The world’s largest chipmaker smashed estimates on both earnings and revenues and offered an upbeat guidance.

Q4 Earnings in Focus

Earnings of $1.52 per share came in 28 cents above the Zacks Consensus Estimate and improved 19% from year-ago earnings. Revenues grew 8% year over year to $20.2 billion, an all-time high, and were better than the estimated $19.2 billion. Robust results were driven by strong growth in its data-center business and increasing demand for higher-performance products used in personal computers and related devices (read: Semiconductor Outperforms in 2019: 5 Best ETFs & Stocks).

Intel expects revenues of $19 billion and earnings per share of $1.30 for the first quarter of 2020, well above the current Zacks Consensus Estimate of $17.24 billion and $1.05, respectively. For 2019, the company forecast revenues of $73.5 billion and earnings per share of $5.00. The Zacks Consensus Estimate is currently pegged at $72.07 billion for revenues and $4.72 for earnings per share.

Following robust results and an upbeat outlook, shares of Intel climbed more than 7.8% in after-market hours on elevated volume. Intel has a Zacks Rank #3 (Hold) and VGM Score of A. It belongs to a favorable Zacks industry (placed at the top 22% of 250+ industries).

ETFs to Tap

Investors could definitely tap the surge in the INTC stock with the help of ETFs that have a large allocation to the biggest semiconductor company (see: all the Technology ETFs here).

VanEck Vectors Semiconductor ETF SMH

This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. Intel occupies the second position with 10.6% of the assets. The product has managed assets worth $1.7 billion and charges 35 bps in annual fees and expenses. It is heavily traded with volume of around 4.3 million shares per day and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

iShares PHLX Semiconductor ETF SOXX

This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. firms with INTC taking the fourth spot with 7.7% allocation. The fund has amassed $2.7 billion in its asset base and trades in volume of about 485,000 shares a day. The product charges a fee of 46 bps a year from investors and has a Zacks ETF Rank #2 with a High risk outlook (read: Top Performing ETFs of the Decade).

First Trust Nasdaq Semiconductor ETF FTXL

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 fifth firm accounting for 7.6% share. FTXL has accumulated $47.6 million in AUM and trades in average daily volume of 17,000 shares. It charges 0.60% in expense ratio and has a Zacks ETF Rank #3.

Invesco Dynamic Semiconductors ETF (TSX:PSI)

This fund tracks the Dynamic Semiconductor Intellidex Index, holding 30 securities in the basket. Intel occupies the seventh position and makes up for 4.7% share in the basket. PSI has lower AUM of $268.5 million and sees moderate average daily volume of about 34,000 shares. It charges 58 bps in annual fees and carries a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.

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iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports

First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports

VanEck Vectors Semiconductor ETF (SMH): ETF Research Reports

Invesco Dynamic Semiconductors ETF (PSI): ETF Research Reports

Intel Corporation (INTC): Free Stock Analysis Report

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Zacks Investment Research