Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundam
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Everybody knows Nvidia (NASDAQ: NVDA) is a leading provider of chips specially designed for artificial intelligence (AI) systems. And everybody knows Nvidia's chief rival across the computing sector is Advanced Micro Devices (NASDAQ: AMD). AMD inspires far fewer AI headlines than
(RTTNews) - AMD (AMD) said that it plans to invest about $400 million over the next five years to expand research, development and engineering operations in India.
Shares of Intel INTC spiked +6% today following the world’s largest semiconductor company’s stronger-than-expected second-quarter results on Thursday evening.
After a rocky 2022, the
crypto market bounced back in a big way in 2023. Bitcoin (
BTC-USD
), by far the largest digital asset by market cap, is up 75% year-to-date, while Ethereum (
ETH-USD
), the second-largest, is up more than 50% over the same time frame. The crypto-focused
VanEck Digital Transformation ETF (
NASDAQ:DAPP)
has taken advantage of this resurgent crypto interest to gain nearly 200% year-to-date.
While DAPP’s 2023 performance has been stellar, there are several pros and cons that investors should be aware of before making an investment decision on DAPP.
What Does the DAPP ETF Do?
DAPP is a crypto-focused ETF from ETF and mutual fund provider VanEck. It seeks to track the results of its underlying index, the MVIS Global Digital Assets Equity Index, which intends to “track the performance of companies that are participating in the digital assets economies," according to VanEck. Its ticker alludes to decentralized applications or "dApps," the user-facing smart contracts that exist on blockchains like Ethereum.
DAPP launched in April of 2021, and it is still relatively small in the bigger investing picture, with about $64 million in assets under management (AUM).
DAPP's Holdings
DAPP features a fairly limited scope of holdings. It holds just 20 stocks, and its top 10 holdings make up 63.1% of the fund's assets. Below, you’ll find an overview of
DAPP’s top holdings using TipRanks’ holdings tool.
Aside from holding just 20 stocks, DAPP also lacks diversification in that outside of top holding Coinbase Global (
NASDAQ:COIN
) and top 10 positions in MicroStrategy (
NASDAQ:MSTR
) and Block (
NYSE:SQ
), the fund is pretty much dominated by Bitcoin miners and companies that make Bitcoin mining equipment. This includes companies like Terawulf (
NASDAQ:WULF
), Riot Platforms (
NASDAQ:RIOT
), Marathon Digital (
NASDAQ:MARA
), and Canaan (
NASDAQ:CAN
).
This isn’t a bad thing in and of itself, but for an ETF touting the digital transformation of the economy, it seems like a missed opportunity to invest in some of the many other interesting names that are involved in different aspects of the crypto industry. Plus, owning a dozen different miners doesn't do much for DAPP's diversification, as these stocks all more or less move based on the ups and downs of the price of Bitcoin.
Stocks that would have been interesting to include in a digital transformation ETF are semiconductor companies like Nvidia (
NASDAQ:NVDA
) and Advanced Micro Devices (
NASDAQ:AMD
) that provide the graphics processing units (GPUs) used by Bitcoin miners. Other interesting stocks would be dominant payment networks like Visa (
NYSE:V
) and Mastercard (
NYSE:MA
), which have invested time and resources in the crypto space and are adopting blockchain technology.
How about CME Group (
NASDAQ:CME
), the parent company of the CME exchange, which, in addition to commodities in the energy and agricultural markets, provides futures and options trading for Bitcoin and Ethereum?
Shopify (
NYSE:SHOP
) would have been a solid inclusion as well, as the e-commerce leader has forayed into crypto in a variety of ways and is making it a bigger part of its strategy. Or, if the fund wanted to get even more creative and approach it from a different angle, it could even include something like Starbucks (
NASDAQ:SBUX
), which has incorporated NFTs into its popular loyalty program (with promising results).
As is, DAPP's holdings are a mixed bag when it comes to their Smart Scores, as six of its top 10 positions feature a Smart Score of 8 or higher, while the rest feature neutral scores. 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.
DAPP itself has a neutral ETF Smart Score of 7.
Is Its Expense Ratio High?
DAPP’s expense ratio of 0.50% is somewhat middle-of-the-road. On the one hand, it is considerably higher than most ETFs that I would typically consider investing in. On the other hand, it should be noted that it isn’t as expensive as many of the other ETFs in the crypto space, where jarringly-high fees seem to be par for the course.
DAPP’s expense ratio is equal to that of the
Global X Blockchain ETF (
NASDAQ:BKCH)
, but it is considerably lower than that of the
Bitwise Crypto Industry Innovators ETF (
NYSEARCA:BITQ)
, which has a sky-high expense ratio of 0.85%, and the
Amplify Transformational Data Sharing ETF (
NYSEARCA:BLOK)
, which also has a much higher expense ratio of 0.75%.
DAPP’s expense ratio of 0.50% means that an investor allocating $10,000 into DAPP will pay $50 in fees over the course of the year. Assuming the expense ratio remains consistent over time and that the ETF returns 5% per year going forward, this DAPP investor would pay $160 in fees over a three-year time frame and $280 in fees over a five-year time frame. Over the course of 10 years, the investor would pay $628 in fees.
Is DAPP Stock a Buy, According to Analysts?
Turning to Wall Street, DAPP has a Moderate Buy consensus rating, as 75.41% of analyst ratings are Buys, 14.75% are Holds, and 9.84% are Sells. At $9.63, the
average DAPP stock price target implies 15.6% upside potential.
Investor Takeaway
DAPP has been a strong performer year-to-date, and it deserves credit for that. On the downside, it isn’t particularly diversified, and I feel that it missed the opportunity to look beyond the usual suspects for like Coinbase and miners to add some compelling investments to the fund that are participating in the "digital transformation" in different ways.
Furthermore, its expense ratio isn’t great, but in fairness, it is lower than that of many of its competitors in the crypto space. Additionally, DAPP’s relatively small size could make it susceptible to market volatility.
Lastly, while DAPP has been a strong performer in 2023, it has actually lost about 50% since its inception in 2021. For these reasons, I can’t really call DAPP a compelling investment opportunity at this time.
Disclosure
U.S. President Joe Biden is planning to sign an executive order to limit critical U.S. technology investments in China by mid-August, Bloomberg news reported on Friday, citing people familiar with the internal deliberations.
Advanced Micro Devices AMD is set to release its second-quarter 2023 results on Aug 1.AMD expects second-quarter 2023 revenues to be $5.3 billion (+/-$300 million), which indicates a year-over-year decline of 19% and approximately
In today's video, I'm looking into Intel's (NASDAQ: INTC) latest earnings report, shedding light on the current state of the semiconductor market and crucial insights that Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) shareholders should know about. Check out the
Intel shares rose over 4% on Friday, a day after the chipmaker's unexpectedly strong quarterly report heralded a turnaround in fortunes after a long, margin-sapping struggle due to plummeting PC sales and a highly competitive data center market.
Two U.S. lawmakers who head a committee focused on China on
Friday urged the Biden administration to tighten export
restrictions on artificial intelligence chips in the wake of
industry lobbying to leave the rules unchanged.
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundam
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For Immediate ReleaseChicago, IL – July 28, 2023 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks
Intel shares surged 7% on Friday, a day after the chipmaker's unexpectedly strong quarterly report heralded a turnaround in fortunes after a long, margin-sapping struggle due to plummeting PC sales and a highly competitive data center market.
India wants to emerge as a trusted partner for the semiconductor industry and is keen to be a chip supplier for the world, Prime Minister Narendra Modi said on Friday, as he steps up efforts to attract global investors to establish production in the country.
Intel (
NASDAQ:INTC
) stock is up about 8% in after-hours trading as the company
jumped to profit in Q2 and delivered
stronger-than-expected results. Meanwhile, management now expects a sequential improvement in sales and margins. Despite the solid quarterly performance and upbeat outlook, Wall Street analysts didn’t change their stance on INTC stock, with most of them either recommending a Hold or a Sell, implying it’s not the time to go long.
Analysts Weigh In
Intel’s second-quarter results exceeded expectations, indicating continued financial improvement. At the same time, the accelerating
AI (artificial intelligence) opportunity bodes well for growth. However, this hasn’t led analysts to change their stance on INTC stock.
Following the Q2 earnings,
Goldman Sachs analyst Toshiya Hari reiterated a Sell recommendation on Intel stock. While the analyst acknowledged the company’s solid execution in the second quarter, he awaits a recovery in the “valuation-enhancing Data Center market” to turn constructive on INTC stock.
Along with Hari,
Rosenblatt Securities analyst Hans Mosesmann also reiterated a Sell rating on Intel stock following its Q2 performance. Mosesmann expects the company to lose market share to Advanced Micro Devices (
NASDAQ:AMD
), Broadcom (
NASDAQ:AVGO
), and Marvell (
NASDAQ:MRVL
).
Echoing similar sentiments,
Tristan Gerra of Robert W. Baird expects AMD to gain further market share against Intel in 2023. The analyst maintained his Hold rating on the stock.
Like Gerra,
Vijay Rakesh of Mizuho Securities also reiterated a Hold on INTC stock on July 27. While the analyst raised his revenue and EPS estimates for Q3 and increased the price target to $36 from $33, he retained a Hold as he believes that the company faces “challenges with AI spend eating into DC (Data Center) budgets.” Further, the competition from AMD remains a drag.
Is Intel a Buy, Sell, or Hold?
Intel is poised to benefit from easing inventory and margin headwinds. Further, Intel Foundry Services is well-positioned to capitalize on the AI market opportunity. In addition, management remains upbeat about the PC market in the long term.
However, market share losses to competitors, manufacturing delays, and challenges in the Data Center market could continue to limit the upside potential in
INTC stock.
Intel has received two Buy, 12 Hold, and five Sell recommendations for a Hold consensus rating. Analysts’ average price target of $32.32 implies 6.45% downside potential from current levels.
Disclosure
TipRanks
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