For Immediate Release
Chicago, IL – April 6, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Vishay Intertechnology, Inc. (
VSH Quick Quote VSH - Free Report) , Applied Materials, Inc. ( AMAT Quick Quote AMAT - Free Report) , MACOM Technology Solutions Holdings, Inc. ( MTSI Quick Quote MTSI - Free Report) , Micron Technology, Inc. ( MU Quick Quote MU - Free Report) and Analog Devices, Inc. ( ADI Quick Quote ADI - Free Report) . Here are highlights from Monday’s Analyst Blog: 5 Semi Stocks to Gain from Infrastructure Overhaul
Shortage of semiconductor chips has necessitated heavy investments in the manufacturing domain.
Global chip shortage has also aggravated fears regarding China targeting global leadership in the semiconductor industry. Notably, U.S. semiconductor companies account for 47% of global chip sales, while 12% of global manufacturing is done in the country.
The apprehensions gained further momentum following an investment of $120 billion by Chinese government to shore up the semiconductor industry in the country.
In fact, on Feb 11, the Semiconductor Industry Association (SIA) board of directors, emphasized in a
letter to President Biden that the share of global semiconductor manufacturing in the United States has steadily declined from 37% in 1990 to 12%, presently.
The letter was intended to draw the President's attention to this concern and urge him to include robust funding for semiconductor manufacturing and research in his recovery and infrastructure plan.
In this regard, President Biden earmarking a significant amount on infrastructure spending is expected to come as a respite for semiconductor manufacturing stocks. Biden's $2.3 trillion infrastructure overhaul spending package calls for $50 billion for the American semiconductor industry in an attempt to address a worldwide shortage of chips. The plan also sets aside an amount of $174 billion to boost the electric vehicles markets.
Biden's focus on the electric car industry and expansion of high-speed broadband access is expected to aid semiconductor companies, which provide chips and other components utilized in electric cars and support the digitization.
Growth Prospects Abound
Technology is driving digitalization and semiconductors are the backbone of the current-day technology-driven economy.
The digitization across industries, adoption of cloud computing, and the integration of AI and machine learning are fueling the demand for semiconductors, like never-before. This has highlighted the need to tackle the manufacturing woes to the core.
announced on Mar 1 that global semiconductor sales reached $40 billion in January 2021, up 13.2% year over year, driven by rise in semiconductor production to meet pent-up demand and ease the ongoing chip shortage that is persistently affecting the auto sector and others. Also, sales inched up 1% beginning December 2020.
In fact, per
IDC data, the global semiconductor market is projected to hit $476 billion in 2021, up 7.7% on a year-over-year basis, based on gradual recovery as economies open up following circulation of COVID-19 vaccines.
Further, increasing adoption of multi-cloud and network upgrades to support 5G is a tailwind.
The optimism surrounding semiconductor stocks can also be ascertained by the robust performance of iShares PHLX Semiconductor ETF in the past year, which has rallied 103.5% compared with the SPDR S&P 500 ETF's rise of 51.3%. Further, SPDR S&P Semiconductor ETF, which tracks the S&P Semiconductor Select Industry Index, has gained 113.9% in the past year.
Considering growth prospects of the chip makers driven by the optimism stemming from the new plan amid the 5G boom and HPC push tailwinds, it makes sense to invest for long-term gains. Here we shortlisted five stocks that appear alluring investment options at the moment.
Vishay Intertechnology is riding on strength across its resistor, diode and opto product lines and expanding manufacturing capacities. Further, robust magnetics offerings, which are driving growth in the specialty business, are contributing to its performance. Also, expanding presence in the industrial, military and medical end-markets owing to strong resistors and capacitors is a positive.
Additionally, growing opportunities for capacitors in the areas of power transmission and electro cars are tailwinds. Further, recovery in the automotive sector and Asian markets especially China is another positive.
Moreover, solid momentum of MOSFETs across automotive market is a tailwind for this currently Zacks Rank #1 (Strong Buy) company. You can see
. the complete list of today's Zacks #1 Rank stocks here
The Zacks Consensus Estimate for the company's 2021 earnings has been revised upward by 30.1% in the past 60 days to $1.73 per share.
Applied Materials is driven by strong momentum across Semiconductor Systems and Applied Global Services. Further, solid demand for silicon in several applications across various markets remains a tailwind.
Additionally, growing momentum among long-term service agreements is fueling the performance. Furthermore, increased consumer spending in foundry and logic on the back of rising need for specialty nodes in automotive, power, 5G rollout, IoT, communications and image sensor markets is a major positive.
Also, strong momentum in conductor etches is benefiting the company's position in DRAM and NAND.
The Zacks Consensus Estimate for the company's fiscal 2021 earnings has been revised upward by 19.4% in the past 60 days to $5.98 per share. Applied Materials currently carries a Zacks Rank #2 (Buy).
MACOM Technology Solutions is gaining from the growing proliferation of cloud services and solid momentum across data center and telecom markets. Increasing clout of cloud services is benefiting both domestic and international deployments of the company.
Additionally, high-performance analog components such as TIAs, CDRs and drivers, which are required in 100G deployment, are strengthening the company's presence in the data center market further.
The company remains optimistic regarding strong 5G network deployments, rising demand for its RF and microwave products, strength across defense applications and growing data center traffic, which are expected to continue driving its top-line growth in the near term.
The Zacks Consensus Estimate for MACOM's fiscal 2021 earnings has been revised upward by a penny in the past seven days to $1.89 per share. MACOM carries a Zacks Rank #2, at present.
In semiconductor-memory vertical,
Micron Technology is gaining from solid memory-chip demand among data-center operators as more and more workers and students work and learn from home amid coronavirus induced social-distancing measures.
Furthermore, it is well-poised to benefit from the resurgence in DRAM demand, backed by a progress in customer inventory adjustments in the cloud, graphics and the PC markets. Increasing mix of high-value solutions, enhancement in customer engagement and improvement in cost structure are positives.
Growing demand from cloud-computing providers and acceleration in 5G adoption are also contributing to the performance of this currently Zacks Rank #2 company.
Digitization across industries, increased uptake of cloud computing and services, and the integration of AI and machine learning are likely to fuel demand for Micron's chips.
The Zacks Consensus Estimate for fiscal 2021 earnings has been revised upward by 15.9% in 30 days' time to $4.52 per share.
Last but not least, investors can count on
Analog Devices, which is benefiting from strengthening momentum across electric vehicle space on the back of its robust Battery Management System (BMS) solutions.
Markedly, the company offers solid power protection, optical network control, sensor and connectivity infrastructure, and DC-DC power conversion solutions utilized in high density servers, storage and networking equipment, which enable data center operators to bolster efficiency.
Additionally, rising acceptance of advanced radio systems in 5G infrastructures is strengthening the company's communication business. Furthermore, the solid momentum of the HEV platform across the cabin electronics ecosystem remains a tailwind. Management also remains optimistic about growth opportunities related to 5G.
Further, growing power design wins are major positives for this currently Zacks Rank #2 company. Notably, the company is acquiring Maxim. The deal is expected to drive Analog Devices' growth across several emerging growth markets.
The consensus mark of $6.01 per share for its fiscal 2021 earnings has moved north by a penny over the past seven days.
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