We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Top Semiconductor Stocks to Buy Amid Escalating War Tensions
Read MoreHide Full Article
The global chip shortage, which has been a headwind since the onset of the coronavirus pandemic, is likely to worsen due to the ongoing war between Russia and Ukraine.
Notably, the war has disrupted the supply chain further as both countries control the supply of raw materials required to manufacture semiconductors.
Nevertheless, the impacts of Russia-Ukraine conflict are expected to be limited as most semiconductor companies have kept their raw materials stocked and diversified their sourcing. Further, both the United States and the U.K. reportedly hold the potential of subsiding the risk of further chip shortage as they are the major suppliers of some of the key raw materials.
Apart from this, the growing demand for consumer electronics, automotive, industrial tools & equipment, and networking & communication products is expected to act as a tailwind for the semiconductor industry.
More Into Growth Prospects
The coronavirus pandemic-driven remote-working and online-learning trends boosted the demand for processors used in enterprise laptops and data center servers. This, in turn, is acting as a key catalyst for the industry’s growth.
The increasing demand for autonomous and electric vehicles remains another tailwind. The growing adoption of recent technologies like the Internet of Things, artificial intelligence and virtual reality by various industries like healthcare, defense and retail is also aiding the semiconductor space.
The above-mentioned factors are likely to continue to drive growth in the underlined industry in the near term, as well as in the long haul.
Notably, the Precedence Research report indicates that the semiconductor market will reach $808.5 billion by 2030 from $430 billion in 2021, witnessing a CAGR of 6.6% between 2021 and 2030.
The impressive performance of the semiconductor industry in January 2022 testifies to the above-mentioned factors.
Per the latest report from the Semiconductor Industry Association, global semiconductor industry sales were $50.7 billion for January 2022, which increased 26.8% year over year. However, sales declined minutely by 0.2% from the prior month.
Apart from this, the broader iShares PHLX Semiconductor ETF (SOXX), which measures the performance of the semiconductor industry of the U.S. equity market, has gained 16.4% over a year. Further, ProShares Ultra Semiconductors ETF (USD) has gained 37.5% in the same time frame.
Stocks to Buy
Given the above-mentioned factors, here we have picked four semiconductor stocks that have strong fundamentals, and the combination of a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
One-Year Price Performance
Image Source: Zacks Investment Research
MaxLinear (MXL - Free Report) is continuously gaining from the solid momentum in broadband access, connectivity, infrastructure and industrial multi-markets. Growing platform design wins across multiple geographies in new end markets also remain beneficial for the company.
In addition to these, MXL is consistently working toward bringing advanced solutions to gain momentum among customers. It recently introduced a fully integrated SoC named Sierra for 4G/5G Open RAN radio units. Further, the company’s MxL1600 family of RF Transceivers has been selected by a leading provider of wireless network solutions, ZHT, for its 5G radio remote unit small cells.This remains another tailwind for the company.
MaxLinear, sporting a Zacks Rank #1 at present, has a Growth Score of A. The MXL stock has gained 72.4% over a year. The long-term earnings growth rate for the company is currently projected at 20%.
Advanced Micro Devices (AMD - Free Report) is benefiting from the robust performance of Computing and Graphics, and Enterprise Embedded and Semi-Custom segments. It has been benefiting from strong sales of Ryzen and EPYC server processors, owing to the increasing proliferation of artificial intelligence and machine learning in industries like cloud, gaming and supercomputing domain. Recently, its third-generation EPYC processors have been selected by Google Cloud to power new C2D instances for high-performance memory-bound workloads. This remains a positive factor for AMD.
Apart from this, the growing clout of seven-nanometer products in the data center vertical, driven by the work-from-home and online-learning trends, remains a key catalyst for AMD. The company’s recent acquisition of Xilinx to strengthen its data center business remains another notable step.
Advanced Micro Devices, currently flaunting a Zacks Rank #1, has a Growth Score of B. The AMD stock has returned 42.8% in the past year. The long-term earnings growth rate for the stock is currently projected at 29.1%.
United Microelectronics (UMC - Free Report) has been consistently gaining momentum among customers on the back of its comprehensive portfolio of technology offerings. In addition, growing wafer shipments are contributing well to top-line growth. Also, UMC’s 28-nanometer technologies are driving overall wafer ASP (average selling price). This remains a positive.
The growing adoption of 5G phones, electric vehicles and Internet of Things-based devices are creating demand for silicon content. This, in turn, is increasing the demand for foundry. Thus, the company’s strengthening position in the foundry capacity remains a tailwind.
United Microelectronics, carrying a Zacks Rank #2 at present, has a Growth Score of A. Further, the UMC stock has gained 10.6% over a year. The long-term earnings growth rate for the stock is currently projected at 29%.
NXP Semiconductors (NXPI - Free Report) has been benefiting from its strong position in secular growth markets, including automotive, industrial & IoT, and communication infrastructure. The solid momentum in RF power for base stations remains another tailwind. Further, the company’s growing efforts to develop an improved 5nm design strategy, with an aim to increase software performance required in future cars, remain positives.
In addition to these, NXPI is consistently gaining momentum in the 5G market on the back of its robust technology and solutions. Rising 5G network deployments are driving growth in its communication business. Further, its Layerscape processors have been recently selected by Compal Electronics to enhance 5G-integrated small-cell solutions for 5G network deployments. This remains a tailwind for NXPI.
NXP Semiconductors, currently carrying a Zacks Rank #2, has a Growth Score of B. The NXPI stock has returned 2.1% in the past year. The long-term earnings growth rate for the stock is currently projected at 22%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
4 Top Semiconductor Stocks to Buy Amid Escalating War Tensions
The global chip shortage, which has been a headwind since the onset of the coronavirus pandemic, is likely to worsen due to the ongoing war between Russia and Ukraine.
Notably, the war has disrupted the supply chain further as both countries control the supply of raw materials required to manufacture semiconductors.
Nevertheless, the impacts of Russia-Ukraine conflict are expected to be limited as most semiconductor companies have kept their raw materials stocked and diversified their sourcing. Further, both the United States and the U.K. reportedly hold the potential of subsiding the risk of further chip shortage as they are the major suppliers of some of the key raw materials.
Apart from this, the growing demand for consumer electronics, automotive, industrial tools & equipment, and networking & communication products is expected to act as a tailwind for the semiconductor industry.
More Into Growth Prospects
The coronavirus pandemic-driven remote-working and online-learning trends boosted the demand for processors used in enterprise laptops and data center servers. This, in turn, is acting as a key catalyst for the industry’s growth.
The increasing demand for autonomous and electric vehicles remains another tailwind. The growing adoption of recent technologies like the Internet of Things, artificial intelligence and virtual reality by various industries like healthcare, defense and retail is also aiding the semiconductor space.
The above-mentioned factors are likely to continue to drive growth in the underlined industry in the near term, as well as in the long haul.
Notably, the Precedence Research report indicates that the semiconductor market will reach $808.5 billion by 2030 from $430 billion in 2021, witnessing a CAGR of 6.6% between 2021 and 2030.
The impressive performance of the semiconductor industry in January 2022 testifies to the above-mentioned factors.
Per the latest report from the Semiconductor Industry Association, global semiconductor industry sales were $50.7 billion for January 2022, which increased 26.8% year over year. However, sales declined minutely by 0.2% from the prior month.
Apart from this, the broader iShares PHLX Semiconductor ETF (SOXX), which measures the performance of the semiconductor industry of the U.S. equity market, has gained 16.4% over a year. Further, ProShares Ultra Semiconductors ETF (USD) has gained 37.5% in the same time frame.
Stocks to Buy
Given the above-mentioned factors, here we have picked four semiconductor stocks that have strong fundamentals, and the combination of a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
One-Year Price Performance
Image Source: Zacks Investment Research
MaxLinear (MXL - Free Report) is continuously gaining from the solid momentum in broadband access, connectivity, infrastructure and industrial multi-markets. Growing platform design wins across multiple geographies in new end markets also remain beneficial for the company.
In addition to these, MXL is consistently working toward bringing advanced solutions to gain momentum among customers. It recently introduced a fully integrated SoC named Sierra for 4G/5G Open RAN radio units. Further, the company’s MxL1600 family of RF Transceivers has been selected by a leading provider of wireless network solutions, ZHT, for its 5G radio remote unit small cells.This remains another tailwind for the company.
MaxLinear, sporting a Zacks Rank #1 at present, has a Growth Score of A. The MXL stock has gained 72.4% over a year. The long-term earnings growth rate for the company is currently projected at 20%.
Advanced Micro Devices (AMD - Free Report) is benefiting from the robust performance of Computing and Graphics, and Enterprise Embedded and Semi-Custom segments. It has been benefiting from strong sales of Ryzen and EPYC server processors, owing to the increasing proliferation of artificial intelligence and machine learning in industries like cloud, gaming and supercomputing domain. Recently, its third-generation EPYC processors have been selected by Google Cloud to power new C2D instances for high-performance memory-bound workloads. This remains a positive factor for AMD.
Apart from this, the growing clout of seven-nanometer products in the data center vertical, driven by the work-from-home and online-learning trends, remains a key catalyst for AMD. The company’s recent acquisition of Xilinx to strengthen its data center business remains another notable step.
Advanced Micro Devices, currently flaunting a Zacks Rank #1, has a Growth Score of B. The AMD stock has returned 42.8% in the past year. The long-term earnings growth rate for the stock is currently projected at 29.1%.
United Microelectronics (UMC - Free Report) has been consistently gaining momentum among customers on the back of its comprehensive portfolio of technology offerings. In addition, growing wafer shipments are contributing well to top-line growth. Also, UMC’s 28-nanometer technologies are driving overall wafer ASP (average selling price). This remains a positive.
The growing adoption of 5G phones, electric vehicles and Internet of Things-based devices are creating demand for silicon content. This, in turn, is increasing the demand for foundry. Thus, the company’s strengthening position in the foundry capacity remains a tailwind.
United Microelectronics, carrying a Zacks Rank #2 at present, has a Growth Score of A. Further, the UMC stock has gained 10.6% over a year. The long-term earnings growth rate for the stock is currently projected at 29%.
NXP Semiconductors (NXPI - Free Report) has been benefiting from its strong position in secular growth markets, including automotive, industrial & IoT, and communication infrastructure. The solid momentum in RF power for base stations remains another tailwind. Further, the company’s growing efforts to develop an improved 5nm design strategy, with an aim to increase software performance required in future cars, remain positives.
In addition to these, NXPI is consistently gaining momentum in the 5G market on the back of its robust technology and solutions. Rising 5G network deployments are driving growth in its communication business. Further, its Layerscape processors have been recently selected by Compal Electronics to enhance 5G-integrated small-cell solutions for 5G network deployments. This remains a tailwind for NXPI.
NXP Semiconductors, currently carrying a Zacks Rank #2, has a Growth Score of B. The NXPI stock has returned 2.1% in the past year. The long-term earnings growth rate for the stock is currently projected at 22%.