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The Zacks Analyst Blog Highlights NVIDIA, Intel, Microchip Technology, ON Semiconductor and NXP Semiconductors (Revised)
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For Immediate Release
Chicago, IL – July 12, 2023 – 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: NVIDIA Corp. (NVDA - Free Report) , Intel Corp. (INTC - Free Report) , Microchip Technology (MCHP - Free Report) , ON Semiconductor Corp. (ON - Free Report) and NXP Semiconductors (NXPI - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
5 Solid Semiconductor Stocks to Buy on Rebound in Chip Sales
The semiconductor industry, which has been suffering over the past year, seems to be making a steady rebound. Sales increased for the third consecutive month in May, per the latest report from the Semiconductor Industry Association (SIA).
The rebound seems to have matched economists' predictions that global semiconductor sales would bottom by the end of the first quarter before making a recovery. Although there are multiple challenges, the semiconductor industry is poised to grow in the coming days.
Semiconductor Sales Steadily Increasing
According to the latest report from SIA, global semiconductor sales totaled $40.7 billion in May, increasing 1.7% from April's total of $40 billion. Although May's figures are still down 21.1% year over year, semiconductor sales have now grown for the third consecutive month.
John Neuffer, SIA president and CEO said, "Despite continuing market sluggishness compared to 2022, month-to-month global semiconductor sales inched upward in May for the third consecutive month, sparking optimism for a possible market rebound during the second half of the year."
Regionally, sales increased across all regions. Sales in China and Europe rose 3.9% and 2%, respectively. In Asia Pacific/Others, Americas and Japan, sales climbed 1.3%, 0.1% and 0.4%, respectively.
Surging demand for electronic goods and the remote working and learning culture, which boosted demand for PCs and other communication devices during the peak of the pandemic, saw semiconductor sales skyrocketing.
However, higher demand and subsequent supply-chain issues owing to the lockdowns soon resulted in a shortage of semiconductors globally and created a turmoil in multiple end-user industries like automobiles, power, lighting and electronics.
The supply-chain crisis, however, got resolved in 2022 and demand fell. The industry has since been suffering. Despite that, 2022 emerged as the best year for the semiconductor industry, with sales climbing 3.2% to $573.5 billion from $555.9 billion in 2021.
Besides several interrelated factors like rising prices, geopolitical tensions and pandemic aftereffects have contributed to the current short-term decline in the semiconductor industry. However, demand is still strong.
The widespread adoption and increased use of consumer electronics worldwide, the growing presence of artificial intelligence (AI), the Internet of Things (IoT) and machine learning (ML) technologies is driving demand for semiconductors, which is likely to further boost demand for semiconductors in the near term.
Our Picks
Given the bright prospects of the industry, it would be wise to invest in semiconductor stocks. Below are five chip stocks that investors can gain from in the near term.
NVIDIA Corp. is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, GPU. Over the years, NVDA's focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms. NVIDIA's GPU success can be attributed to its parallel processing capabilities supported by thousands of computing cores, necessary to run deep-learning algorithms.
NVIDIA's expected earnings growth rate for next year is 33%. The Zacks Consensus Estimate for current-year earnings has improved 70.1% over the past 60 days. NVDA presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Intel Corp. is the world's largest semiconductor company and primary supplier of microprocessors and chipsets. INTC is gradually reducing its dependence on the PC-centric business by moving into data-centric businesses — such as AI and autonomous driving.
Intel Corporation's expected earnings growth rate for next year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the past 60 days. INTC presently carries a Zacks Rank #2 (Buy).
Microchip Technology has been consistently benefiting from its strength in analog and microcontroller businesses. MCHP's dominance in 8, 16, and 32-bit PIC microcontrollers remains a major driver of top-line and bookings growth. Microchip Technology has acquired notable companies like Tekron International, Microsemi and Atmel to add strength to its product offerings.
Microchip Technology's expected earnings growth rate for next year is 3.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. MCHP currently has a Zacks Rank #2.
ON Semiconductor Corp. is a supplier of broadband and power management integrated circuits and standard semiconductors used in numerous advanced devices ranging from high-speed fiber optic networking equipment to the precise power management functions found in portable electronics. ON's products provide clock management and data flow management for precision computing and communications systems, and power management for distributing and monitoring the supply of power to different elements within virtually every electronic device.
ON Semiconductor's expected earnings growth rate for next year is 10.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 60 days. ON currently has a Zacks Rank #2.
NXP Semiconductors provides high-performance mixed-signal and standard product solutions that leverage its RF, analog, power management, interface, security, as well as digital processing expertise. NXPI seems well-positioned to capitalize on the level 2-5 automotive market. Additionally, NXP Semiconductors is the leader in general-purpose microcontrollers and application processors in industrial and IoT markets.
NXP Semiconductors’ expected earnings growth rate for next year is 8.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. Presently, NXPI carries a Zacks Rank #2.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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.
(We are reissuing this article to correct a mistake. The original article, issued on July 12, 2023, should no longer be relied upon.)
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The Zacks Analyst Blog Highlights NVIDIA, Intel, Microchip Technology, ON Semiconductor and NXP Semiconductors (Revised)
For Immediate Release
Chicago, IL – July 12, 2023 – 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: NVIDIA Corp. (NVDA - Free Report) , Intel Corp. (INTC - Free Report) , Microchip Technology (MCHP - Free Report) , ON Semiconductor Corp. (ON - Free Report) and NXP Semiconductors (NXPI - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
5 Solid Semiconductor Stocks to Buy on Rebound in Chip Sales
The semiconductor industry, which has been suffering over the past year, seems to be making a steady rebound. Sales increased for the third consecutive month in May, per the latest report from the Semiconductor Industry Association (SIA).
The rebound seems to have matched economists' predictions that global semiconductor sales would bottom by the end of the first quarter before making a recovery. Although there are multiple challenges, the semiconductor industry is poised to grow in the coming days.
Semiconductor Sales Steadily Increasing
According to the latest report from SIA, global semiconductor sales totaled $40.7 billion in May, increasing 1.7% from April's total of $40 billion. Although May's figures are still down 21.1% year over year, semiconductor sales have now grown for the third consecutive month.
John Neuffer, SIA president and CEO said, "Despite continuing market sluggishness compared to 2022, month-to-month global semiconductor sales inched upward in May for the third consecutive month, sparking optimism for a possible market rebound during the second half of the year."
Regionally, sales increased across all regions. Sales in China and Europe rose 3.9% and 2%, respectively. In Asia Pacific/Others, Americas and Japan, sales climbed 1.3%, 0.1% and 0.4%, respectively.
Surging demand for electronic goods and the remote working and learning culture, which boosted demand for PCs and other communication devices during the peak of the pandemic, saw semiconductor sales skyrocketing.
However, higher demand and subsequent supply-chain issues owing to the lockdowns soon resulted in a shortage of semiconductors globally and created a turmoil in multiple end-user industries like automobiles, power, lighting and electronics.
The supply-chain crisis, however, got resolved in 2022 and demand fell. The industry has since been suffering. Despite that, 2022 emerged as the best year for the semiconductor industry, with sales climbing 3.2% to $573.5 billion from $555.9 billion in 2021.
Besides several interrelated factors like rising prices, geopolitical tensions and pandemic aftereffects have contributed to the current short-term decline in the semiconductor industry. However, demand is still strong.
The widespread adoption and increased use of consumer electronics worldwide, the growing presence of artificial intelligence (AI), the Internet of Things (IoT) and machine learning (ML) technologies is driving demand for semiconductors, which is likely to further boost demand for semiconductors in the near term.
Our Picks
Given the bright prospects of the industry, it would be wise to invest in semiconductor stocks. Below are five chip stocks that investors can gain from in the near term.
NVIDIA Corp. is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, GPU. Over the years, NVDA's focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms. NVIDIA's GPU success can be attributed to its parallel processing capabilities supported by thousands of computing cores, necessary to run deep-learning algorithms.
NVIDIA's expected earnings growth rate for next year is 33%. The Zacks Consensus Estimate for current-year earnings has improved 70.1% over the past 60 days. NVDA presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Intel Corp. is the world's largest semiconductor company and primary supplier of microprocessors and chipsets. INTC is gradually reducing its dependence on the PC-centric business by moving into data-centric businesses — such as AI and autonomous driving.
Intel Corporation's expected earnings growth rate for next year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the past 60 days. INTC presently carries a Zacks Rank #2 (Buy).
Microchip Technology has been consistently benefiting from its strength in analog and microcontroller businesses. MCHP's dominance in 8, 16, and 32-bit PIC microcontrollers remains a major driver of top-line and bookings growth. Microchip Technology has acquired notable companies like Tekron International, Microsemi and Atmel to add strength to its product offerings.
Microchip Technology's expected earnings growth rate for next year is 3.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. MCHP currently has a Zacks Rank #2.
ON Semiconductor Corp. is a supplier of broadband and power management integrated circuits and standard semiconductors used in numerous advanced devices ranging from high-speed fiber optic networking equipment to the precise power management functions found in portable electronics. ON's products provide clock management and data flow management for precision computing and communications systems, and power management for distributing and monitoring the supply of power to different elements within virtually every electronic device.
ON Semiconductor's expected earnings growth rate for next year is 10.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 60 days. ON currently has a Zacks Rank #2.
NXP Semiconductors provides high-performance mixed-signal and standard product solutions that leverage its RF, analog, power management, interface, security, as well as digital processing expertise. NXPI seems well-positioned to capitalize on the level 2-5 automotive market. Additionally, NXP Semiconductors is the leader in general-purpose microcontrollers and application processors in industrial and IoT markets.
NXP Semiconductors’ expected earnings growth rate for next year is 8.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. Presently, NXPI carries a Zacks Rank #2.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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.
(We are reissuing this article to correct a mistake. The original article, issued on July 12, 2023, should no longer be relied upon.)