Semiconductor ETFs in Focus Ahead of Q4 Earnings

The semiconductor space has been surging over the past three months on improving demand from chips suppliers, data centers, PC manufacturers, and mobile phone producers, as well as China. The Philadelphia Semiconductor Index gained more than 30% from a two-year low in mid-October, outperforming the tech-heavy Nasdaq 100 Index, which added about 10% in the same period.

As such, Invesco PHLX Semiconductor ETF SOXQ, iShares Semiconductor ETF SOXX, VanEck Vectors Semiconductor ETF SMH and First Trust NASDAQ Semiconductor ETF FTXL have gained 25.7%, 26.3%, 29.2% and 23.3%, respectively, over the past three months. The strong trend is likely to continue in the weeks ahead as the Q4 earnings season picks up pace. Texas Instruments TXN came up with robust results, beating revenue and earnings estimates for the fourth quarter. The result is expected to add fuel to the sector.

Easing inflation and hopes of a less hawkish Fed fueled the rally in the overall tech sector. Additionally, the analyst Barclays Capital upped its stance on some chip stocks ahead of earnings, suggesting that the worst might be over for semiconductors (read: Is the Worst Over for Semiconductor Stocks & ETFs?).