Today's Must Read
Intel (INTC) Banks on Portfolio Strength Amid 7 nm Delay
Broadcom (AVGO) Banks on Wireless Products & Acquisitions
Friday, October 2, 2020
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including NVIDIA (NVDA), Intel (INTC) and Broadcom (AVGO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
NVIDIA shares have vastly outperformed the Zacks General Semiconductor industry in the year-to-date period (+131.4% vs. +31.8%) as the company has emerged as leader in the chip space. The Zacks analyst believes that NVIDIA is benefiting from the coronavirus-induced work-from-home and learn-at-home wave.
It is also benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, a surge in Hyperscale demand remains a tailwind for the company’s Data Center business. Expansion of NVIDIA GeForce NOW is expected to drive user base. Further, solid uptake of AI-based smart cockpit infotainment solutions is a boon.
Additionally, collaboration with Daimler-owned Mercedes-Benz is expected to further strengthen NVIDIA’s presence in the autonomous vehicles and other automotive electronics space. However, management expects COVID-19 pandemic to negatively impact near-term revenues by $100 million.
Shares of Intel have lagged the red hot chip space given teh company's uneven operating performance, but the Zacks analyst is optimistic about the company's long-term outlook given continued strength across both PC-centric and Data-centric domains.
Robust mix of high-performance second-generation Xeon Scalable processors and solid demand from Cloud service providers are expected to boost growth. Strong momentum for 10 nanometer (nm) mobile CPU bodes well. Notably, the company provided encouraging 2020 guidance. Further, solid uptake of 5G networking solutions, higher Wi-Fi and modem sales and solid notebook demand, improvement in NAND pricing trends led higher ASPs, and Optane bit growth, remain tailwinds.
However, anticipated decline in PC total addressable market, and production delays pertaining to 7 nm ramp up remain concerns. Also, the coronavirus crisis-led weakness in retail, automotive and industrial end markets is a headwind.
Broadcom shares have gained +54.8% over the past six months against the Zacks Electronics - Semiconductors industry’s rise of +60.8%. The Zacks analyst believes that Broadcom is poised to benefit from robust adoption of Wi-Fi 6 in access gateway, and DSL and cable DOCSIS 3.1 products.
Acceleration in 5G deployments, significant production ramp up and increase in RF content favors prospects. Further, synergies from acquisitions of CA and Symantec’s enterprise security business are anticipated to bolster the company’s presence in infrastructure software vertical.
The company has also provided encouraging guidance for Q4 on strong uptick in wireless revenues, which bodes well. However, anticipated sluggishness in enterprise demand might impact server storage revenues. Efforts to reduce channel inventory amid COVID-19 pandemic led market uncertainty and increasing lead times, is likely to weigh on industrial revenues.
Other noteworthy reports we are featuring today include Northrop Grumman (NOC), American Airlines (AAL) and Telephone and Data Systems (TDS).
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Director of Research
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>