Semiconductor ETFs are receiving a new jolt of energy from the most unlikely of places, Intel Corp. (NASDAQ:INTC).
The chipmaker’s stronger-than-expected third-quarter results have propelled its stock higher and put a spotlight back on ETFs exposed to Intel, which has long lagged behind the likes of Nvidia Corp (NASDAQ:NVDA) and Advanced Micro Devices Inc (NASDAQ:AMD) in the AI bonanza.
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Funds like the VanEck Semiconductor ETF (NASDAQ:SMH), iShares Semiconductor ETF (NASDAQ:SOXX), and SPDR S&P Semiconductor ETF (NYSE:XSD) are among the biggest winners of Intel’s surprise breakout.
SMH and SOXX traditionally skewed heavier on Nvidia and Broadcom Inc (NASDAQ:AVGO). Yet, Intel is a top-10 holding in each.
In contrast, XSD’s equal weight provides the chipmaker with a more diversified representation, setting it up to gain more evenly from Intel’s gains post-earnings. Each of the three ETFs were up around 1.5% Friday morning.
Investors speculating on more general AI hardware exposure can also see secondary benefit in thematic ETFs like the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ), which follow big U.S. chipmakers across the computing, data center, and AI infrastructure segments. This fund is up by more than 2% today, buoyed by Intel’s EPS gains.
Intel’s third-quarter results provided a welcome upside surprise. The firm reported revenue of $13.65 billion, exceeding estimates of $13.14 billion. Its adjusted earnings of 23 cents per share contrasted with expectations of just one cent. Stocks surged following the print, indicating fresh hopes that the chipmaker is ultimately beginning to turn a corner.
CEO Lip-Bu Tan emphasized the ways in which AI is accelerating demand for compute and expanding opportunities through Intel’s x86 platforms and foundry services. Not all segments performed up to mark: Data center and AI revenue declined 1% year-over-year, and foundry sales fell 2%.
For the moment, Intel’s turnaround suggests a more balanced act for semiconductor ETFs. The ultimate test? Whether Intel’s new momentum can sustain itself beyond one earnings cycle.
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