Semiconductor ETFs Look Decent Post Q3 Earnings

The semiconductor sector has been on a remarkable rally in the past month. The expansion of artificial intelligence (AI) applications and the new monetary easing era led to a rally in semiconductor stocks. Additionally, a spate of stronger earnings reports from well-known players in the space added to the strength.

As such, VanEck Vectors Semiconductor ETF SMH, iShares Semiconductor ETF SOXX, Invesco PHLX Semiconductor ETF SOXQ, First Trust NASDAQ Semiconductor ETF FTXL and Strive U.S. Semiconductor ETF SHOC have gained 4.5%, 0.4%, 1.8%, 2.1% and 2.4%, respectively, in the past month.

Let’s dig into the individual earnings releases:

Semiconductor Earnings in Focus

Intel INTC, the world’s largest chipmaker, reported a loss per share of 46 cents, wider than the Zacks Consensus Estimate of a loss of 20 cents. Revenues declined 6% year over year to $13.28 billion and edged past the estimated $13 billion. For the current quarter, Intel guided revenues of $13.3-$14.3 billion and adjusted earnings of 12 cents per share.

Texas Instruments TXN reported solid third-quarter 2024 results. Earnings beat the Zacks Consensus Estimate by 11 cents but revenues lagged the same by $40 million. For the fourth quarter of 2024, the company expects revenues in the range of $3.70-$4.00 billion and earnings per share in the band of $1.07-$1.29. 

Lam Research LRCX topped revenue and earnings estimates for first-quarter fiscal 2025. Earnings per share of 86 cents surpassed the Zacks Consensus Estimate by 6 cents, while revenues of $4.17 billion edged past the estimated $4.05 billion. For second-quarter fiscal 2025, the company expects revenues of $4.30 billion (+/- $300 million) and earnings per share of 87 cents (+/- 10 cents). 

Taiwan Semiconductor Manufacturing TSM reported robust third-quarter 2024 results. The company reported earnings per ADR of $1.94, which outpaced the Zacks Consensus Estimate of $1.74. Revenues rose 36% year over year to $23.5 billion and were above the estimate of $22.72 billion. For the fourth quarter, the company expects revenues to grow 35% year over year to $26.1-$26.9 billion (read: Buy Taiwan Semiconductor-Heavy ETFs on Upbeat Earnings).

Advanced Micro Devices AMD reported earnings of 92 cents per share, beating the Zacks Consensus Estimate by a penny. Revenues of $6.82 billion edged past the consensus mark of $6.71 million. AMD expects fourth-quarter 2024 revenues of $7.5 billion (+/-$300 million).

At Qualcomm QCOM, fourth-quarter fiscal 2024 earnings per share of $2.69 surpassed the Zacks Consensus Estimate by 13 cents. Revenues of $10.24 billion edged past the estimate of $9.9 billion. The company projects revenues of $10.5-$11.3 billion and earnings per share in the range of $2.85-$3.05 for the first quarter of fiscal 2025.

ETFs in Focus

VanEck Vectors Semiconductor ETF (SMH)

VanEck Vectors Semiconductor ETF provides exposure to 26 companies involved in semiconductor production and equipment by tracking the MVIS US Listed Semiconductor 25 Index. It has managed assets worth $25.4 billion and charges 35 bps in annual fees and expenses. The in-focus six firms account for 33.4% share in the basket.

VanEck Vectors Semiconductor ETF is heavily traded, with a volume of around 6 million shares per day. It has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.

iShares Semiconductor ETF (SOXX)

iShares Semiconductor ETF follows the NYSE 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 six firms collectively making up 33.4% of the assets. 

iShares Semiconductor ETF has amassed $14.4 billion in its asset base and trades in a volume of about 3 million shares a day. The product charges a fee of 35 bps a year from investors and has a Zacks ETF Rank #1 with a High risk outlook (read: Leveraged ETFs for Longer-Term Investors).

Invesco PHLX Semiconductor ETF (SOXQ)

Invesco PHLX Semiconductor ETF tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. The in-focus six firms collectively make up a combined 28.6% share in the basket.

Invesco PHLX Semiconductor ETF has accumulated $510.2 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 405,000 shares. SOXQ FTXL has a Zacks ETF Rank #1.

First Trust Nasdaq Semiconductor ETF (FTXL)

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 in-focus six firms accounting for a combined 26.8% share. 

First Trust Nasdaq Semiconductor ETF has accumulated $1.4 billion in AUM. The average trading volume is light at around 28,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1 (read: What Lies Ahead for Semiconductor ETFs: Boom or Gloom?).

Strive U.S. Semiconductor ETF (SHOC)

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 in-focus firms accounting for a combined 22.5% share. 

Strive U.S. Semiconductor ETF has AUM of $81.4 million and charges 40 bps in annual fees. It trades in a volume of 27,000 shares per day on average and has a Zacks ETF Rank #1.

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