ETFs to Buy as Intel Plunges 17% Despite Q4 Earnings Beat

Core Insights - Intel Corp. experienced a significant 17% drop in share price on January 23, 2026, following its fourth-quarter 2025 earnings report, despite exceeding earnings and revenue expectations. The disappointing outlook for Q1 2026 is believed to have triggered this sell-off [1][10]. Financial Performance - Intel reported adjusted earnings of 15 cents per share, surpassing the Zacks Consensus Estimate by 87.5%, and showing a 15.4% increase year-over-year. Revenues reached $13.67 billion, beating consensus estimates by 2.3% and reflecting a 4.1% year-over-year growth [4]. - The company noted that its AI infrastructure build-out contributed to double-digit growth in AI PC, traditional server, and networking revenues year-over-year. However, the adjusted gross margin decreased by 420 basis points year-over-year due to the early ramp of Intel 18A technology [5]. Outlook and Guidance - Intel provided a soft revenue guidance for Q1 2026, indicating a year-over-year decline primarily due to internal supply constraints. The Client Computing Group (CCG) is expected to experience a more significant revenue drop compared to the Datacenter and AI Group (DCAI) as the company prioritizes supply for server markets [6]. - The company anticipates improvements in its factory network starting in Q2 2026, which should help achieve positive adjusted free cash flow by the end of 2026 [7]. Analyst Reactions - Following the earnings report, Stifel raised its price target for Intel's stock from $35.00 to $42.00 while maintaining a Hold rating. Analysts believe Intel is operating near full manufacturing capacity and see potential for organic growth through better pricing and product mix without additional capital spending. They project a recovery in gross margins toward 40% by mid-2027, contingent on the maturation of the 18A process technology [8]. Investment Opportunities - For investors looking to mitigate volatility while capturing Intel's growth, Exchange-Traded Funds (ETFs) are suggested as a prudent approach. These ETFs provide diversified exposure to the semiconductor sector and other industries, balancing Intel's potential upside with the stability of its peers [3]. - Specific ETFs highlighted include: - First Trust NASDAQ Semiconductor ETF (FTXL): $1.55 billion in net assets, Intel accounts for 9.55% of the fund, which has gained 15.8% year-to-date [11]. - Pacer Data and Digital Revolution ETF (TRFK): $422.8 million in assets, Intel holds a 5.49% share, with a 1.2% year-to-date gain [12]. - iShares MSCI USA Value Factor ETF (VLUE): $9.32 billion in net assets, Intel represents 5.06% of the fund, which has risen 6.1% year-to-date [13]. - VanEck Semiconductor ETF (SMH): $76.6 million in assets, Intel accounts for 4.64% of the fund, which has increased by 11.1% year-to-date [14].