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The Zacks Analyst Blog Highlights: Texas Instruments, NVIDIA, Analog Devices, Semtech Corp and Vishay Intertechnology
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For Immediate Release
Chicago, IL – October 7, 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: Texas Instruments Incorporated (TXN - Free Report) , NVIDIA Corporation (NVDA - Free Report) , Analog Devices, Inc. (ADI - Free Report) , Semtech Corporation (SMTC - Free Report) and Vishay Intertechnology, Inc. (VSH - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
5 Solid Stocks to Buy in a Thriving Semiconductor Industry
Several industries have been hit hard owing to the global semiconductor shortage. Even microchip makers are struggling to meet the global demand. However, that has been working miracles for the semiconductor industry, with sales surging every month.
According to the Semiconductor Industry Association (SIA), global microchip sales rose both month over month and year over year in August. And with no signs of the shortage easing, sales are likely to be high in the coming months.
Semiconductor Sales Rise in August
The SIA said on Oct 5 that global semiconductor sales reached $47.2 billion in August, jumping 29.7% year over year from $36.4 billion. Moreover, sales rose 3.3% from July’s total of $45.7 billion.
According to SIA, chip shipments have been on the rise and hit record highs in recent months as the industry continued to ramp up production owing to a huge demand for microchips across major industries, including auto, computers and electronic goods.
Sales grew across all regions on a year-over-year basis in August, with sales jumping 33.5% in Europe, 30.8% in China, 28.2% in the Asia Pacific, 30.6% in the Americas and 23.8% in Japan. Month over month, sales increased 4.9% in the Americas, 3.4% in China, 3.3% in Japan, 2.6% in Asia Pacific/All Other, and 1.5% in Europe.
Semiconductor Industry Booming
After an outstanding 2020, the dream run for the semiconductor industry has continued this year. While the pandemic took its toll on several industries, the semiconductor industry continued to thrive. As more people worked and learned from home, they invested heavily in electronic items, computers and accessories. This gave a thrust to the demand for microchips, thus helping drive sales.
However, the problem now seems to be a different one. While microchip has been soaring on higher demand, industries are now facing supply shortages that are affecting them. The auto industry and computer makers seem to be the biggest sufferers of this shortage.
According to IHS Markit, microchip shortage will see a cut in production of vehicles by 700,000 in the third quarter, as carmakers continue to halt production temporarily. According to Bloomberg, this could result in a loss of $61 billion in revenues by the end of this year.
Industry executives now believe that this supply crunch could continue into 2022 and even 2023. However, this will only benefit the semiconductor industry. Semiconductor sales came in at $133.6 billion in the second quarter, reflecting an increase of 29.2% year over year and a jump of 8.3% from the first quarter of 2021.
Our Choices
Given the rising demand for semiconductors and continuing supply crunch, the semiconductor industry is only likely to benefit in the near term. Below are five chip stocks that investors can gain from in the current scenario.
Texas Instruments is an original equipment manufacturer of analog, mixed-signal and digital-signal processing integrated circuits. The company recently announced that it would be introducing a new TI-84 graphing calculator that will support the programming language Python.
NVIDIA is the worldwide leader in visual computing technologies and inventor of the graphic processing unit, GPU. 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 68%. The Zacks Consensus Estimate for current-year earnings improved 5.8% over the past 60 days. Nvidia has a Zacks Rank #2.
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal and digital signal processing integrated circuits.
The company’s expected earnings growth rate for the next year is 30.6%. The Zacks Consensus Estimate for current-year earnings improved 2.2% over the past 60 days. Analog Devices carries a Zacks Rank #2.
Semtech’sdevices are used in a variety of applications including computer, communications, industrial, military-aerospace and automotive. The company also provides a limited amount of wafer foundry services to other electronic component manufacturers.
The company’s expected earnings growth rate for the current year is 45.7%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. Semtech has a Zacks Rank #1.
Vishay Intertechnologyis a global manufacturer and supplier of semiconductors and passive components. Its products include metal oxide semiconductor field-effect transistors, Diodes and Optoelectronic Components.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the past 60 days. Vishay Intertechnology has a Zacks Rank #2.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Texas Instruments, NVIDIA, Analog Devices, Semtech Corp and Vishay Intertechnology
For Immediate Release
Chicago, IL – October 7, 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: Texas Instruments Incorporated (TXN - Free Report) , NVIDIA Corporation (NVDA - Free Report) , Analog Devices, Inc. (ADI - Free Report) , Semtech Corporation (SMTC - Free Report) and Vishay Intertechnology, Inc. (VSH - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
5 Solid Stocks to Buy in a Thriving Semiconductor Industry
Several industries have been hit hard owing to the global semiconductor shortage. Even microchip makers are struggling to meet the global demand. However, that has been working miracles for the semiconductor industry, with sales surging every month.
According to the Semiconductor Industry Association (SIA), global microchip sales rose both month over month and year over year in August. And with no signs of the shortage easing, sales are likely to be high in the coming months.
Semiconductor Sales Rise in August
The SIA said on Oct 5 that global semiconductor sales reached $47.2 billion in August, jumping 29.7% year over year from $36.4 billion. Moreover, sales rose 3.3% from July’s total of $45.7 billion.
According to SIA, chip shipments have been on the rise and hit record highs in recent months as the industry continued to ramp up production owing to a huge demand for microchips across major industries, including auto, computers and electronic goods.
Sales grew across all regions on a year-over-year basis in August, with sales jumping 33.5% in Europe, 30.8% in China, 28.2% in the Asia Pacific, 30.6% in the Americas and 23.8% in Japan. Month over month, sales increased 4.9% in the Americas, 3.4% in China, 3.3% in Japan, 2.6% in Asia Pacific/All Other, and 1.5% in Europe.
Semiconductor Industry Booming
After an outstanding 2020, the dream run for the semiconductor industry has continued this year. While the pandemic took its toll on several industries, the semiconductor industry continued to thrive. As more people worked and learned from home, they invested heavily in electronic items, computers and accessories. This gave a thrust to the demand for microchips, thus helping drive sales.
However, the problem now seems to be a different one. While microchip has been soaring on higher demand, industries are now facing supply shortages that are affecting them. The auto industry and computer makers seem to be the biggest sufferers of this shortage.
According to IHS Markit, microchip shortage will see a cut in production of vehicles by 700,000 in the third quarter, as carmakers continue to halt production temporarily. According to Bloomberg, this could result in a loss of $61 billion in revenues by the end of this year.
Industry executives now believe that this supply crunch could continue into 2022 and even 2023. However, this will only benefit the semiconductor industry. Semiconductor sales came in at $133.6 billion in the second quarter, reflecting an increase of 29.2% year over year and a jump of 8.3% from the first quarter of 2021.
Our Choices
Given the rising demand for semiconductors and continuing supply crunch, the semiconductor industry is only likely to benefit in the near term. Below are five chip stocks that investors can gain from in the current scenario.
Texas Instruments is an original equipment manufacturer of analog, mixed-signal and digital-signal processing integrated circuits. The company recently announced that it would be introducing a new TI-84 graphing calculator that will support the programming language Python.
The company’s expected earnings growth rate for the current year is 31.7%. Its shares advanced 2.1% in the past 30 days. Texas Instruments carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA is the worldwide leader in visual computing technologies and inventor of the graphic processing unit, GPU. 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 68%. The Zacks Consensus Estimate for current-year earnings improved 5.8% over the past 60 days. Nvidia has a Zacks Rank #2.
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal and digital signal processing integrated circuits.
The company’s expected earnings growth rate for the next year is 30.6%. The Zacks Consensus Estimate for current-year earnings improved 2.2% over the past 60 days. Analog Devices carries a Zacks Rank #2.
Semtech’sdevices are used in a variety of applications including computer, communications, industrial, military-aerospace and automotive. The company also provides a limited amount of wafer foundry services to other electronic component manufacturers.
The company’s expected earnings growth rate for the current year is 45.7%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. Semtech has a Zacks Rank #1.
Vishay Intertechnologyis a global manufacturer and supplier of semiconductors and passive components. Its products include metal oxide semiconductor field-effect transistors, Diodes and Optoelectronic Components.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the past 60 days. Vishay Intertechnology has a Zacks Rank #2.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.