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4 Stocks to Watch on Steady Growth in Semiconductor Sales
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The semiconductor industry has been trying to stage a solid comeback this year. Although global semiconductor sales have declined year over year, higher demand has been driving sales over the past few months.
Also, cooling inflation is giving a boost to demand for semiconductors across other industries. Given this situation, investing in stocks like NVIDIA Corporation (NVDA - Free Report) , Intel Corporation (INTC - Free Report) , Qorvo, Inc. (QRVO - Free Report) and Lam Research Corporation (LRCX - Free Report) would be a wise decision.
Semiconductor Sales Jump
The Semiconductor Industry Association (SIA) said that global semiconductor sales rose 6.3%, totaling $134.7 billion, in the third quarter. This follows a 4.7% jump in the second quarter when semiconductor sales totaled $124.5 billion.
Month over month, semiconductor sales jumped 1.9% in September, increasing for the seventh consecutive month. Semiconductor sales also increased 1.9% in August.
However, year-over-year sales were still down 4.5% in the third quarter. Regionally, sales increased 3.4% in Asia Pacific, 2.4% in the Americas, 0.5% in China and 3% in Europe.
Experts had earlier predicted that semiconductor sales would bottom by the first quarter of 2023 before making a steady rebound. The forecast appears to have matched as growing demand for semiconductors across industries has been once again boosting sales.
Semiconductor sales took a hit last year after a solid 2020 and 2021 thanks to the pandemic that boosted demand for personal communication devices and indoor entertainment as millions worked from home.
However, geopolitical factors, especially a slowing Chinese economy and the ongoing Russia-Ukraine war coupled with the Federal Reserve’s monetary tightening policy to curb sky-high inflation, weighed on the semiconductor market.
The Fed increased interest rates by 525 basis points since March 2022. However, it left interest rates unchanged in its last two meetings as inflation finally seems to be showing signs of easing.
This definitely bodes well for the semiconductor industry. Also, the high demand for semiconductors can be attributed to the widespread adoption and increased use of consumer electronics globally.
Moreover, the escalating influence of transformative technologies like artificial intelligence, the Internet of Things, and machine learning is a significant factor contributing to this demand across various industries.
Stocks to Watch
NVIDIA Corporation 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 52%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% 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 Corporation 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 103.4%. The Zacks Consensus Estimate for current-year earnings has improved 45.9% over the past 60 days. INTC presently carries a Zacks Rank #1.
Qorvo, Inc. is a leading provider of core technologies and radio frequency (RF) solutions for mobile, infrastructure and aerospace/defense applications. QRVO was formed with the merger of semiconductor manufacturing firms RF Micro Devices Inc. and TriQuint Semiconductor Inc. in an all-stock transaction.
Qorvo’s expected earnings growth rate for next year is 51.9%. The Zacks Consensus Estimate for current-year earnings has improved 10.9% over the past 60 days. QRVO presently carries a Zacks Rank #2.
Lam Research Corporation supplies wafer fabrication equipment and services to the semiconductor industry. LAM’s products are used by semiconductor manufacturers in front-end and WLP processes, creating memory, microprocessors, and other logic-integrated circuits for a broad range of electronic devices.
Lam Research Corporation’s expected earnings growth rate for next year is 20%. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the past 60 days. LRCX currently has a Zacks Rank #3 (Hold).
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4 Stocks to Watch on Steady Growth in Semiconductor Sales
The semiconductor industry has been trying to stage a solid comeback this year. Although global semiconductor sales have declined year over year, higher demand has been driving sales over the past few months.
Also, cooling inflation is giving a boost to demand for semiconductors across other industries. Given this situation, investing in stocks like NVIDIA Corporation (NVDA - Free Report) , Intel Corporation (INTC - Free Report) , Qorvo, Inc. (QRVO - Free Report) and Lam Research Corporation (LRCX - Free Report) would be a wise decision.
Semiconductor Sales Jump
The Semiconductor Industry Association (SIA) said that global semiconductor sales rose 6.3%, totaling $134.7 billion, in the third quarter. This follows a 4.7% jump in the second quarter when semiconductor sales totaled $124.5 billion.
Month over month, semiconductor sales jumped 1.9% in September, increasing for the seventh consecutive month. Semiconductor sales also increased 1.9% in August.
However, year-over-year sales were still down 4.5% in the third quarter. Regionally, sales increased 3.4% in Asia Pacific, 2.4% in the Americas, 0.5% in China and 3% in Europe.
Experts had earlier predicted that semiconductor sales would bottom by the first quarter of 2023 before making a steady rebound. The forecast appears to have matched as growing demand for semiconductors across industries has been once again boosting sales.
Semiconductor sales took a hit last year after a solid 2020 and 2021 thanks to the pandemic that boosted demand for personal communication devices and indoor entertainment as millions worked from home.
However, geopolitical factors, especially a slowing Chinese economy and the ongoing Russia-Ukraine war coupled with the Federal Reserve’s monetary tightening policy to curb sky-high inflation, weighed on the semiconductor market.
The Fed increased interest rates by 525 basis points since March 2022. However, it left interest rates unchanged in its last two meetings as inflation finally seems to be showing signs of easing.
This definitely bodes well for the semiconductor industry. Also, the high demand for semiconductors can be attributed to the widespread adoption and increased use of consumer electronics globally.
Moreover, the escalating influence of transformative technologies like artificial intelligence, the Internet of Things, and machine learning is a significant factor contributing to this demand across various industries.
Stocks to Watch
NVIDIA Corporation 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 52%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% 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 Corporation 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 103.4%. The Zacks Consensus Estimate for current-year earnings has improved 45.9% over the past 60 days. INTC presently carries a Zacks Rank #1.
Qorvo, Inc. is a leading provider of core technologies and radio frequency (RF) solutions for mobile, infrastructure and aerospace/defense applications. QRVO was formed with the merger of semiconductor manufacturing firms RF Micro Devices Inc. and TriQuint Semiconductor Inc. in an all-stock transaction.
Qorvo’s expected earnings growth rate for next year is 51.9%. The Zacks Consensus Estimate for current-year earnings has improved 10.9% over the past 60 days. QRVO presently carries a Zacks Rank #2.
Lam Research Corporation supplies wafer fabrication equipment and services to the semiconductor industry. LAM’s products are used by semiconductor manufacturers in front-end and WLP processes, creating memory, microprocessors, and other logic-integrated circuits for a broad range of electronic devices.
Lam Research Corporation’s expected earnings growth rate for next year is 20%. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the past 60 days. LRCX currently has a Zacks Rank #3 (Hold).