Intel's (INTC - Get Report) first-quarter results will highlight the company's data-center business, as technologies such as virtual reality, artificial intelligence and autonomous driving rely on more on GPUs than CPUs, an area where Intel has lagged.
In the past few years, Intel has spent nearly $30 billion trying to catch up to the competition, as the tech industry shifts away from -x86 architecture and more toward ARM-based intellectual property. The most recent acquisition is Intel's proposed deal for Mobileye (MBLY) which will help Intel firmly plant itself into the autonomous driving space, thanks to Mobileye's advanced driving assistance software (ADAS).
Global chip sales during the second-half of 2016 and into the first part of 2017 have recovered, Wells Fargo analyst David noted, citing data from the Semiconductor Industry Association (SIA) and monthly Taiwanese electronics sales data. That should continue to help Intel meet or beat its guidance, along with the continued rebound in the PC business.
Analysts surveyed by Yahoo! Finance expect the company to earn 65 cents a share on $14.8 billion in revenue for the period.
Over the past 12 months, shares of Intel have gained nearly 12% excluding dividends, compared to the near 11% gain in the S&P 500.
Here are five ETFs that may benefit if investors like Intel's first-quarter results.
VanEck Vectors Semiconductor ETF
Jefferies analyst Mark Lipacis, who has a $36 price target on shares of Intel, said it has "historically paid to buy [Intel's] stock during capex cycles," even if earnings quality was low, but this time feels different, because of challenges from competition, a weaker PC and server market than in the past and its M&A deluge which could hurt capital return in 2017.
First Trust NASDAQ Technology Dividend Index Fund
Credit Suisse analyst John Pitzer noted the company's recent manufacturing update -- the first in three years -- shows that Intel still has a three-year lead in scaling innovation, a renewed focus on its foundry business, but that isn't likely to be enough to stave off competition. "Unfortunately, the manufacturing lead has not driven outsized success in new segments (Mobile SoCs, Xeon Phi, AI, AV, FPGAs, OPA) where architectural/design challenges persist," Pitzer wrote in an investor note.
Pitzer has a neutral rating and a $35 price target on shares of Intel.
iShares PHLX Semiconductor ETF
Wells Fargo's Wong noted that optimism from the SIA numbers should hep Intel, at least in the short term.
"We think that a continuing recovery in the computing end markets should enable Intel to meet or beat the midpoint of its March quarter guidance and could well result in improving growth for both Intel's datacenter and PC client businesses through 2017," Wong wrote to investors. "We are reiterating our Outperform rating on Intel, Intel remains our Top Pick."
First Trust Nasdaq Semiconductor ETF