December S&P 500 futures (ESZ23) are down -0.21%, and December Nasdaq 100 E-Mini futures (NQZ23) are down -0.06% this morning as market participants looked ahead to comments from Fed Chair Jerome Powell and other Fed officials later today, while also bracing for more data on the U.S. labor market after a U.S. government shutdown was averted over the weekend.
December S&P 500 futures (ESZ23) are up +0.06%, and December Nasdaq 100 E-Mini futures (NQZ23) are up +0.24% this morning as market participants looked ahead to comments from Fed Chair Jerome Powell and other Fed officials later today, while also bracing for more data on the U.S. labor market after a U.S. government shutdown was averted over the weekend.
Wall Street index futures were subdued on Monday ahead of comments from Federal Reserve officials including Chair Jerome Powell, while investors looked forward to more economic data this week to gauge the central bank's interest-rate outlook.
December S&P 500 futures (ESZ23) are down -0.05%, and December Nasdaq 100 E-Mini futures (NQZ23) are up +0.20% this morning as market participants looked ahead to comments from Fed Chair Jerome Powell and other Fed officials later today, while also bracing for more data on the U.S. labor market after a U.S. government shutdown was averted over the weekend.
EU antitrust regulators have not opened a formal investigation into chips used for artificial intelligence, the European Commission said on Monday, days after the French competition authority raided Nvidia for alleged anti-competitive practices.
The current market is torn between the believers in artificial intelligence and the skeptics. For the believers, this year's outsize move in AI stocks is just a taste of things to come, given that we are still in the early innings of this technological sea change. For skeptics, t
What is a data center? It's a dedicated building filled mostly with clusters of computer servers working in unison to complete tasks, and it's typically managed by tech giants like Microsoft and Amazon (NASDAQ: AMZN). Millions of businesses rent those data centers to store their
Artificial Intelligence (AI) is arguably the most significant technological innovation since the dawn of the internet. AI is transformative because it empowers machines to learn from data, recognize patterns, and make decisions. W
Surging bond yields are rattling U.S. stocks, and some investors worry the richly valued shares of giant technology and growth companies may be another weak spot.
2023 has been a fun year for companies in the realm of artificial intelligence (AI). As a leading maker of current and future AI-engine microchips, Advanced Micro Devices (NASDAQ: AMD) has seen its fair share of market interest.
Who said you must be a Wall Street pro to find great investments? Don't tell that to the users of Robinhood Markets (NASDAQ: HOOD), a stock trading platform popular with retail investors. The platform will even show you the most popular stocks being held by its users.
Perhaps the hottest question in technology investing circles today is whether Nvidia's (NASDAQ: NVDA) eye-popping growth and margins displayed over the course of the past two quarters is sustainable. If artificial-intelligence (AI) accelerators grow at a 50% annualized growth rat
If you're looking for a few ways to benefit from some of the largest tech trends right now, there's no shortage of stocks out there. But sifting through all the available investment ideas and finding a few with the potential to go the distance in your portfolio is much harder.
Michael Burry gained fame by betting against investments. He was featured in The Big Short book and movie for shorting the subprime mortgage market. Burry has taken highly publicized short positions on Tesla stock. Earlier this year, he bet against the S&P 500 and Nasdaq-100.
Cloudflare's (NYSE: NET) stock has rallied more than 30% this year as the cloud-based content delivery network (CDN) provider impressed investors with its robust growth in a tough macroeconomic environment. It expects its revenue to rise 32% in 2023, compared to 49% growth in 202
Warren Buffett doesn't invest in what he doesn't understand, and he has readily admitted that he doesn't understand artificial intelligence (AI). So does that mean the legendary investor doesn't have any AI stocks in his portfolio? Nope.
The
iShares Expanded Tech Sector ETF (
NYSEARCA:IGM)
is a comprehensive ETF that gives investors exposure to the full spectrum of the North American tech sector, as it includes key tech-related stocks that aren't always included in tech ETFs. I believe this $3.1 billion ETF from BlackRock’s (
NYSE:BLK
) iShares is a good way to invest in a broad swath of the tech sector and an attractive investment opportunity overall. Let's dive in.
What is IGM ETF’s Strategy?
According to iShares, IGM seeks to give investors “broad exposure to the technology sector, and technology-related companies in the communication services and consumer discretionary sectors," and it invests in "hardware, software, internet marketing, interactive media, and related companies.”
This inclusion of “technology-related companies in the communication services and consumer discretionary sectors” is key, as it gives investors exposure to stocks that are often conspicuous in their absence from other tech ETFs, as we’ll discuss below.
IGM's Top Holdings
As the name implies, IGM invests in an expanded swath of the tech sector. The ETF holds 280 positions, and its top 10 holdings account for 54.2% of the fund. Below, you’ll find an overview of
IGM’s top 10 holdings using TipRanks’ holdings tool.
As you can see, Alphabet (
NASDAQ:GOOGL
) is the fund’s top holding, followed by other blue-chip technology stocks like Apple (
NASDAQ:AAPL
), Microsoft (
NASDAQ:MSFT
), Nvidia (
NASDAQ:NVDA
) and Meta Platforms (
NASDAQ:META
).
The inclusion of Alphabet and Meta Platforms is notable. While these are often some of the first names that come to mind when we think of technology stocks, they are not always found in other leading tech ETFs.
This is because many indices classify these stocks within the communications services sector. Because of this, you’ll find that top tech ETFs like the
Technology Select Sector SPDR ETF (
NYSEARCA:XLK)
eschew Alphabet and Meta Platforms. These stocks are instead found in the
Communication Services Select Sector SDPR Fund (
NYSEARA:XLC)
, which groups them with companies like AT&T (
NYSE:T
) and Verizon (
NYSE:VZ
).
Other top tech ETFs like the
Fidelity MSCI Information Technology ETF (
NYSEARCA:FTEC)
and the
iShares Global Tech ETF (
IXN)
also pass over these types of stocks. These are all good ETFs, but they all have different ways of classifying what is and isn't a technology stock.
Meanwhile, the
Invesco QQQ Trust (
NASDAQ:QQQ)
, another top tech ETF, gives investors access to all of these stocks. However, it’s important to note that QQQ simply invests in the Nasdaq 100 (
NDX
) index, which is not exclusive to tech stocks, so the fund has large positions in non-tech stocks like Pepsi (
NASDAQ:PEP
) and Costco (
NASDAQ:COST
).
This isn’t a bad thing per se, but it’s important to note that this means QQQ isn’t a pure play on technology, even though the name QQQ has, in many ways, become synonymous with tech investing.
Because IGM's underlying index, the S&P North American Expanded Technology Sector Index, includes technology-related stocks in the communications services and consumer discretionary sectors, these stocks are present here, which in my view, gives investors a more holistic, all-encompassing picture of the tech sector.
My only qualm about IGM’s portfolio is that while it gives investors broad exposure to the tech sector, it doesn’t own Amazon (
NASDAQ:AMZN
), even though this would seem to fit the definition of a technology-related company in the consumer discretionary sector.
Overall, this strategy results in a strong group of holdings, as evidenced by the fact that seven out of IGM’s top 10 holdings feature Outperform-equivalent Smart Scores of 8 or above. The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating.
IGM itself features an Outperform-equivalent ETF Smart Score of 8 out of 10.
As you’ll see below, the analyst community is optimistic as well.
Is IGM Stock a Buy, According to Analysts?
Turning to Wall Street, IGM earns a Moderate Buy consensus rating based on 218 Buys, 60 Holds, and two Sell ratings assigned in the past three months. The
average IGM stock price target of $462.96 implies 21.3% upside potential.
Performance
How has IGM performed over time? Pretty well. IGM has returned 38.8% over the past year. Over the past three years, the fund’s annualized return stands at 7.8% (as of the end of August). Zooming out to five years, IGM has returned a more exciting 14.6% on an annualized basis, and over the past 10 years, it has returned an even better 18.9% on an annualized basis.
These results compare favorably with those of the broader market. For context, the
SPDR S&P 500 ETF (
NYSEARCA:SPY)
, has returned 10.4% over the past three years, 11.0% over the past five years, and 12.7% over the past 10 years.
It’s also worth comparing IGM to other leading tech-specific ETFs like the aforementioned XLK and QQQ. QQQ’s annualized returns over the past three, five, and 10 years come in at 9.3%, 16.0%, and 18.6%, respectively, meaning that IGM trails QQQ over the past three and five years but slightly outperforms it over the past 10 years.
Meanwhile, XLK has outperformed IGM over the past three years with an annualized return of 13.4%, over the past five years with an annualized return of 19.6%, and over the past 10 years with an annualized return of 20.5%.
Ultimately, IGM has slightly outperformed QQQ over a 10-year period and slightly underperformed XLK over the same horizon. But overall, all three of these ETFs have been good performers.
Investing in a fund that is putting up returns of nearly 20% over the course of 10 years will really grow the value of one’s portfolio over time. To illustrate this point, an investor who put $10,000 into IGM in August of 2013 would have $56,400 as of the end of August 2023.
Lastly, IGM has been around for a long time and has generated a near double-digit annualized return of 9.6% since its inception in 2001, turning an initial investment of $10,000 into almost $80,000.
One Notable Downside
The most notable downside of IGM is its expense ratio of 0.41%. While this is a reasonable expense ratio, it’s also higher than that of some of the major aforementioned tech ETFs like XLK and QQQ, which charge 0.10% and 0.20%, respectively.
An investor putting $10,000 into IGM would pay $41 in fees during year one versus $10 for an investor putting the same amount into XLK and $20 for an investor allocating the same amount into QQQ.
The difference in these fees becomes more apparent over time. Assuming that each fund maintains its current expense ratio and returns 5% per year going forward, the same IGM investor would pay $518 in fees over the course of 10 years versus $128 for the XLK investor and $255 for the QQQ investor.
Looking Ahead
IGM gives investors all-encompassing exposure to the technology sector, including stocks like Alphabet, Meta Platforms, and others that many top tech ETFs pass on because they do not classify them as technology stocks. The fund is fairly diversified and has generated strong returns for a prolonged time frame, making it an attractive investment option for investors. The primary downside is that its expense ratio is a bit higher than some of its major competitors, but it's not an egregious fee.
Disclosure
Surging bond yields are rattling U.S. stocks, and some investors worry the richly valued shares of giant technology and growth companies may be another weak spot.
Intel (
NASDAQ:INTC
) used to be the U.S. chip champ, but it lost its footing in recent years. However, investors should prepare for Intel to regain its former status as America's first-choice processor producer. Overall, I am bullish on INTC stock and am ready for it to possibly stage a swift recovery before the end of 2023.
Even though the company has famously lost some of its market share, Intel is still a renowned semiconductor manufacturer. This year, investors have been so enamored with rival chipmakers Advanced Micro Devices (
NASDAQ:AMD
) and Nvidia (
NASDAQ:NVDA
) that stock traders have practically forgotten about Intel.
Ignoring Intel is a mistake, though, since the company is still a chipmaking giant, and INTC stock's rebound could be tremendous. Soon enough, I expect the market to recognize Intel's full value, but by then, it might be too late to invest as the
share price could be much higher than it is today.
Intel Addresses Shortage Issues with New Irish Fab
In the chipmaking business, people sometimes refer to a semiconductor fabrication factory as a "fab." The demand for microchips is intense, and Intel is reportedly having
trouble finding chipmaking employees in its German plant. However, the company is pressing forward and
establishing a new fab in Ireland.
Clearly, Intel sees Europe as a hub of semiconductor manufacturing activity. The company's Fab 34 factory in Leixlip, Ireland, joins Intel's fabs in Magdeburg, Germany, and the company's planned assembly and test facility in Wrocław, Poland.
Ann Kelleher, executive vice president and general manager of Technology Development at Intel, described the production volume at the company's Irish fab as "high-volume." Perhaps the establishment of these Europe-based fabrication factories will help Intel achieve its stated objective of "regaining leadership in process technology by 2025."
In other words, the narrative here isn't that Intel is already the global chipmaking leader; that's not realistic. Rather, Intel is on the comeback trail with a compelling growth story after several challenging years. As Intel CEO Pat Gelsinger put it, the company is, hopefully, "on the path back to process leadership."
Make no mistake about it - Gelsinger is firing a direct salvo at Intel's competitors with these new processors. Audaciously, the CEO warned that there are only three types of chipmakers: "You're big, you're niche, or you're dead." Where does Gelsinger's company fit in, then? "Intel is way too big to be niche, so we'd better be really big," he clarified.
Intel Reminds the Market of Its Innovator Status
Meanwhile, back in the U.S., Intel rolled out some new hardware products at its recent
innovation day event. Even though
not every observer was impressed with Intel's new offerings, Intel Innovation 2023 nonetheless featured some notable AI-compatible processors.
The star of the show was Intel's 14th-generation personal computer chip, known as Meteor Lake. This reportedly includes an
AI co-processor inside of its CPU for robust processing and graphics performance.
Furthermore, Intel featured its new Xeon processors, which are designed to power data centers. Not only that, but Intel also showed off its Arrow Lake and Lunar Lake processors, which will be the successors of the already-powerful Meteor Lake chips. These are set to be released in 2024. Additionally, Intel has a processor that's under development, code-named Panther Lake, which the company expects will be available by 2025.
Is Intel Stock a Buy, According to Analysts?
On TipRanks, INTC comes in as a Hold based on six Buys, 20 Holds, and five Sell ratings assigned by analysts in the past three months. The
average Intel stock price target is $36.13, implying 1.6% upside potential.
Conclusion: Should You Consider Intel Stock?
With the company's new, powerful processors, Gelsinger and Intel are basically saying, "Go big or go home." In 2023, some observers may be underestimating Intel's potential to regain market share in the coming quarters from the likes of Advanced Micro Devices and Nvidia.
Plus, Intel is going all-in on Europe as a chip hub with the company's new Irish fab. Therefore, I'm preparing for big moves from INTC stock, and I believe it's a great time for enterprising investors to consider a share position for the long term.
Disclosure
TipRanks
Checked
29 minutes 27 seconds ago
This feed is responsible for generating the rss feed related to the topic NVDA