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5 Semiconductor Stocks to Buy as Supply Shortage Spurs Demand
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Growing demand from carmakers and electronic goods manufacturers has resulted in a shortage of supply of semiconductors. This has resulted in many carmakers halting the production of their vehicles. At the same time, it means that the semiconductor industry is doing quite well at a time when others are still trying to bounce back from the pandemic blues.
The microchip industry is one of the least pandemic-ravaged industries, much like the tech sector. Needless to say, semiconductors will be in high demand in the coming days but a further supply crunch may compel automakers to go for production cuts.
Microchip Shortage Affecting Auto Industry
The automotive industry’s recovery is getting somewhat delayed due to the global microchip shortage. Carmakers have already suffered a lot with factories remaining closed for weeks and production coming to a halt following the coronavirus outbreak. Things finally started looking up for the auto industry when chip shortage started forming a roadblock for the industry.
On Mar 22, Ford Motor Company (F - Free Report) said that it will be cutting one shift in its Kentucky plant, where its larger F-series trucks are manufactured. Also, the company is planning to temporarily shut one of its plants in Ohio.
Prior to that, General Motors (GM - Free Report) also said that it is planning to partially assemble some trucks and wait till microchips are available. Stellantis N.V. (STLA - Free Report) , earlier known as Fiat Chrysler, also said that it is partially manufacturing some of its trucks as there is a shortage of semiconductors.
Japanese auto giant Honda Motor Co., Ltd. (HMC - Free Report) has also cut its sales target by 100,000 while Nissan Motor Co (NSANY - Free Report) has slashed the number by 150,000.
Semiconductor Industry Poised to Grow
According to the Semiconductor Industry Association (SIA), microchip sales are expected to jump 8.4% in 2021 on a year-over-year basis. The association also predicts that sales will continue to grow as the supply shortage might last through the fourth quarter.
Microchip shortage has left many industries struggling but has also been helping the semiconductor industry as demand continues to soar. As more people stayed home during the pandemic and bought consumer electric goods, the semiconductor industry started struggling to meet the growing demand.
Besides, the semiconductor industry has started 2021 on a high, with sales jumping in January. According to SIA, global semiconductor sales increased 13.2% in January to $40 billion from $35.3 billion a year ago. Also, on a month-over-month basis, sales increased 1% from December’s total of $39.6 billion.
Our Choices
The semiconductor market is likely to continue thriving in 2021. Below are five chip stocks that investors can gain from in the current scenario.
Maxim Integrated Products, Inc. is an original equipment manufacturer of semiconductor analog and mixed-signal integrated circuits. The company has a broad product portfolio that includes analog-to-digital converters, amplifiers and comparators, communications devices, data converters, and management components, sensors and wireless products.
The company’s expected earnings growth rate for the current year is 31.9%. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 60 days. Maxim Integrated Products holds a Zacks Rank #2 (Buy).
NXP Semiconductors N.V. (NXPI - Free Report) provides high-performance, mixed-signal and standard product solutions that leverage its RF, analog, power management, interface, security, as well as digital processing expertise.
The company’s expected earnings growth rate for the next year is 18.6%. The Zacks Consensus Estimate for current-year earnings has improved 13% over the past 60 days. NXP Semiconductors carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA Corporation (NVDA - Free Report) is the worldwide leader in visual computing technologies and inventor of the graphic processing unit. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.
The company’s expected earnings growth rate for the current year is 33.7%. The Zacks Consensus Estimate for current-year earnings has improved 15.1% over the past 60 days. NVIDIA has a Zacks Rank #2.
Texas Instruments Incorporated (TXN - Free Report) is an original equipment manufacturer of analog, mixed-signal and digital-signal processing integrated circuits.
The company’s expected earnings growth rate for the current year is 13.1%. The Zacks Consensus Estimate for current-year earnings has improved 12.9% over the past 30 days. Texas Instruments carries a Zacks Rank #2.
Micron Technology, Inc. (MU - Free Report) through global brands, namely Micron, Crucial and Ballistix, manufactures and markets high-performance memory and storage technologies including Dynamic Random Access Memory, NAND flash memory, NOR Flash, 3D XPoint memory and other technologies.
The company’s expected earnings growth rate for the current year is 59.7%. The Zacks Consensus Estimate for current-year earnings has improved 17.1% over the past 60 days. Micron carries a Zacks Rank #2.
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.
Image: Bigstock
5 Semiconductor Stocks to Buy as Supply Shortage Spurs Demand
Growing demand from carmakers and electronic goods manufacturers has resulted in a shortage of supply of semiconductors. This has resulted in many carmakers halting the production of their vehicles. At the same time, it means that the semiconductor industry is doing quite well at a time when others are still trying to bounce back from the pandemic blues.
The microchip industry is one of the least pandemic-ravaged industries, much like the tech sector. Needless to say, semiconductors will be in high demand in the coming days but a further supply crunch may compel automakers to go for production cuts.
Microchip Shortage Affecting Auto Industry
The automotive industry’s recovery is getting somewhat delayed due to the global microchip shortage. Carmakers have already suffered a lot with factories remaining closed for weeks and production coming to a halt following the coronavirus outbreak. Things finally started looking up for the auto industry when chip shortage started forming a roadblock for the industry.
On Mar 22, Ford Motor Company (F - Free Report) said that it will be cutting one shift in its Kentucky plant, where its larger F-series trucks are manufactured. Also, the company is planning to temporarily shut one of its plants in Ohio.
Prior to that, General Motors (GM - Free Report) also said that it is planning to partially assemble some trucks and wait till microchips are available. Stellantis N.V. (STLA - Free Report) , earlier known as Fiat Chrysler, also said that it is partially manufacturing some of its trucks as there is a shortage of semiconductors.
Japanese auto giant Honda Motor Co., Ltd. (HMC - Free Report) has also cut its sales target by 100,000 while Nissan Motor Co (NSANY - Free Report) has slashed the number by 150,000.
Semiconductor Industry Poised to Grow
According to the Semiconductor Industry Association (SIA), microchip sales are expected to jump 8.4% in 2021 on a year-over-year basis. The association also predicts that sales will continue to grow as the supply shortage might last through the fourth quarter.
Microchip shortage has left many industries struggling but has also been helping the semiconductor industry as demand continues to soar. As more people stayed home during the pandemic and bought consumer electric goods, the semiconductor industry started struggling to meet the growing demand.
Besides, the semiconductor industry has started 2021 on a high, with sales jumping in January. According to SIA, global semiconductor sales increased 13.2% in January to $40 billion from $35.3 billion a year ago. Also, on a month-over-month basis, sales increased 1% from December’s total of $39.6 billion.
Our Choices
The semiconductor market is likely to continue thriving in 2021. Below are five chip stocks that investors can gain from in the current scenario.
Maxim Integrated Products, Inc. is an original equipment manufacturer of semiconductor analog and mixed-signal integrated circuits. The company has a broad product portfolio that includes analog-to-digital converters, amplifiers and comparators, communications devices, data converters, and management components, sensors and wireless products.
The company’s expected earnings growth rate for the current year is 31.9%. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 60 days. Maxim Integrated Products holds a Zacks Rank #2 (Buy).
NXP Semiconductors N.V. (NXPI - Free Report) provides high-performance, mixed-signal and standard product solutions that leverage its RF, analog, power management, interface, security, as well as digital processing expertise.
The company’s expected earnings growth rate for the next year is 18.6%. The Zacks Consensus Estimate for current-year earnings has improved 13% over the past 60 days. NXP Semiconductors carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA Corporation (NVDA - Free Report) is the worldwide leader in visual computing technologies and inventor of the graphic processing unit. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.
The company’s expected earnings growth rate for the current year is 33.7%. The Zacks Consensus Estimate for current-year earnings has improved 15.1% over the past 60 days. NVIDIA has a Zacks Rank #2.
Texas Instruments Incorporated (TXN - Free Report) is an original equipment manufacturer of analog, mixed-signal and digital-signal processing integrated circuits.
The company’s expected earnings growth rate for the current year is 13.1%. The Zacks Consensus Estimate for current-year earnings has improved 12.9% over the past 30 days. Texas Instruments carries a Zacks Rank #2.
Micron Technology, Inc. (MU - Free Report) through global brands, namely Micron, Crucial and Ballistix, manufactures and markets high-performance memory and storage technologies including Dynamic Random Access Memory, NAND flash memory, NOR Flash, 3D XPoint memory and other technologies.
The company’s expected earnings growth rate for the current year is 59.7%. The Zacks Consensus Estimate for current-year earnings has improved 17.1% over the past 60 days. Micron carries a Zacks Rank #2.
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.
See the 5 high-tech stocks now>>