If semiconductor stock MaxLinear (MXL +12.29%) was not on your radar before, it probably showed up last week when it rocketed some 85% higher in a single day after crushing earnings.
MaxLinear makes chips and circuits that it sells to equipment manufacturers that are used to connect broadband, mobile, and data center networks. It is a much smaller competitor of Broadcom (AVGO +2.03%), among others.
The massive one-day share price pop was fueled by its first-quarter earnings report and its outlook for 2026. The company generated a 43% increase in revenue and saw adjusted earnings rise to $0.22 per share from a net loss of $0.05 per share in the same quarter a year ago. Both of these results beat analystsʻ expectations.
Image source: Getty Images.
What excited investors even more was its outlook. For the second quarter, MaxLinear forecasts revenue of $160 million to $170 million, representing a 17% to 24% increase over Q1. In addition, it raised its guidance for 2026 for its fast-growing optical data center chips to $150 million to $170 million, up $30 million to $40 million from previous guidance. The raise was based on heightened demand, particularly in the second half of the year, among its hyperscaler customers, according to management on the earnings call.
It also expects significant growth next year, as it is already building up a strong backlog of business for 2027.
One ETF to capture MaxLinear's meteoric rise
The results and outlook sparked a feeding frenzy, sending the stock from $134.25 at the close of the market on April 23 to $63.52 during the trading day on April 24. That represents an 85% increase. The stock price closed at $60.32 on Friday, which marked a 76% increase.
NASDAQ: MXL
Key Data Points
MaxLinear stock opened 13% lower on Monday, perhaps as investors saw the valuation rising too high and decided to take profits. But the stock is still up about 203% year to date and 421% over the past 12 months.
Obviously, you could invest directly in this stock. While it is not consistently profitable, its growth outlook is promising. But if you are hesitant to invest too much in a small, unprofitable, and potentially volatile tech stock, you may want to instead consider an exchange-traded fund (ETF) that prominently features this stock -- the Invesco Semiconductors ETF (PSI +5.83%).
NYSEMKT: PSI
Key Data Points
This ETF is highly concentrated, tracking the Dynamic Semiconductor Intellidex Index, which comprises 30 semiconductor stocks across all market caps. It is weighted based on a variety of factors, including price momentum, earnings momentum, quality, management action, and value.
MaxLinear is currently the ETF's largest holding, making up 6.76% of the portfolio. Advanced Micro Devices is second, followed by Broadcom and Texas Instruments.
The Invesco Semiconductors ETF jumped 6% last Friday, as opposed to 76%. But it is still up a robust 62% year to date and 177% over the past year, and it has much better three-, five-, and 10-year returns than MaxLinear. Specifically, PSI has an average annualized return of 31% over the past 10 years, compared to 11% for MaxLinear.
This ETF may be a better way to capture the meteoric gains of a stock like MaxLinear while balancing that out with returns from other semiconductor stocks.
