8 Best Semiconductor Stocks To Buy Amid A Global Chip Shortage
Analysts recommend these semiconductor stocks. A global chip shortage has disrupted the semiconductor industry as demand continues to outstrip supply.…
Analysts recommend these semiconductor stocks.
A global chip shortage has disrupted the semiconductor industry as demand continues to outstrip supply. However, analysts now expect the shortage to ease from the second half of the year, and many semiconductor stocks are performing well despite the shortage. Consumer electronics sales are strong. Long-term trends, including online games, cloud computing, artificial intelligence, 5G wireless Next-generation automotive networks and technology are expected to generate sustainable favorable winds for semiconductor inventories for years to come. Here are eight top semiconductor stocks to buy in 2021, according to CFRA Research.
Taiwan Semiconductor Manufacturing Co. (ticker: TSM)
Taiwan Semiconductor Manufacturing is the world’s largest pure play semiconductor foundry. Analyst Hazim Bahari says the company is uniquely positioned to benefit from a combination of booming demand for 5G networks, the Internet of Things and artificial intelligence. The shortage of high-end 5- and 7-nanometer chips has also increased Taiwan Semiconductor’s pricing power and is expected to keep its factories at high capacity until at least 2022, according to Bahari. Over the long term, CFRA expects stable margins and double-digit annual revenue growth, including 17% growth in 2021 and 16% growth in 2022. CFRA has a buy rating and price target of 132 $ for the TSM share.
Nvidia Corp. (NVDA)
Nvidia is a leader in premium graphics and mobile processors for personal computers, workstations and mobile electronics. Analyst Angelo Zino says Nvidia is outperforming its peers, in part thanks to its data center business, which he predicts will grow by at least 20% annually through fiscal 2025. He says Machine learning and inference capabilities are driving demand for enterprise data centers. Additionally, Zino claims that Nvidia’s automotive business, including its autonomous driving and AI cockpit platform, could reach a bullish inflection point over the next two years. CFRA has a “buy” rating and a target price of $ 850 for NVDA shares.
ASML Holding SA (ASML)
ASML is the world’s third largest supplier of semiconductor equipment. Analyst Jun Zhang Tan says the chip shortage is forcing ASML customers to scramble to expand their capacity to meet demand, which is a short-term bullish catalyst for ASML through the end of 2021. Deploying 5G infrastructure and high-power computing applications ultimately demands ASML’s extreme ultraviolet lithography machines, Tan says. While ASML stocks aren’t particularly cheap, Tan says the company’s growth prospects over the next two to three years suggest further room for improvement. CFRA has a “buy” rating and a target price of $ 745 for ASML stock.
Broadcom is a diversified global supplier of analog semiconductors. Zino says Broadcom shares are trading at an attractive valuation and the company also has potential earnings and free cash flow on the rise. Zino is particularly optimistic about Broadcom’s transition to recurring higher-margin infrastructure software revenues. Infrastructure The software helps diversify Broadcom’s business away from pure semiconductors. Zino anticipates increased spending from cloud customers and telecom providers, which is good news for Broadcom’s near-term demand. The stock also pays a 3% dividend, a rarity within the semiconductor group. CFRA has a “strong buy” rating and a target price of $ 510 for AVGO stock.
Advanced micro-systems (AMD)
Shares of graphics chip and semiconductor company Advanced Micro Devices have risen more than 1,700% in the past five years, but Zino says the company’s momentum and market share gains suggest that ‘there is more potential to come. Zino says AMD should continue to gain shares of Intel Corp. (INTC) in the central processing unit data center market with the deployment of AMD’s next-generation processors. Zino also expects gross margin expansion and balance sheet improvements as the company’s sales mix shifts to higher-priced, higher-margin next-generation processors. CFRA has a “buy” rating and a target price of $ 100 for AMD stocks.
Micron technology (UM)
Micron Technology specializes in semiconductor memory products. Zino is optimistic about the attractive valuation of Micron and the fundamental outlook for the memory market. According to him, an increase in data center orders should lead to a sharp increase in the prices of dynamic random access memory. Market fundamentals have stabilized for NAND, a commonly used storage medium, and Zino says demand for Micron’s solid-state offerings will increase over time. Zino predicts earnings per share will more than double in 2021 to $ 5.51 and then almost double again to $ 10.80 in 2022. CFRA has a buy rating and price target of $ 108 for MU action.
NXP Semiconductors NV (NXPI)
NXP Semiconductors provides high performance mixed signal chips for the mobile payment market, the auto market and other end markets. Zino claims that NXP has the opportunity to gain market share in both the automotive and mobile markets. He estimates that nearly a third of NXP’s automotive exposure is in high-growth areas, such as electrification and advanced driver assistance systems. Zino says that improving NXP’s financial position will allow the company to return more money to shareholders. In the first quarter, NXP increased its dividend by 50% and repurchased $ 1 billion of shares. CFRA has a “strong buy” rating and a target price of $ 234 for NXPI stock.
KLA Corp. (KLAC)
KLA provides performance monitoring and process control systems for the semiconductor industry. Zino says both yield process management and control are long-term growth opportunities, and KLA is a major player in every market. He claims that KLA’s margin profile is superior to its peers and that the company has the option to extend its operating margins until 2022. In the future, the proliferation of lower nanoscale nodes will generate a number Growing performance issues and defects, which Zino says is good. news for the UCK. He predicts EPS growth of 82% in 2021. CFRA has a “buy” rating and a price target of $ 350 for KLA stock.
Best Semiconductor Stocks To Buy:
– Taiwan Semiconductor Manufacturing Co. (TSM)
– Nvidia Corp. (NVDA)
– ASML Holding SA (ASML)
– Broadcom (AVGO)
– Advanced micro-systems (AMD)
– Micron technology (UM)
– NXP Semiconductors NV (NXPI)
– KLA Corp. (KLAC)
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8 Best Semiconductor Stocks To Buy Amid A Global Chip Shortage originally appeared on usnews.com