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The semiconductor market has historically been highly cyclical as it is closely connected to various other markets. This normal fluctuation along with the current trade war with China has created a market that has done significantly worse than the S&P YTD. That being said, here are some semiconductor stocks that seem to be outperforming the market given the current situation.
All 5 stocks in this article have a Zacks Rank #2 (Buy) or better, with the sole exception of Advanced Micro Devices (AMD - Free Report) . Additionally, all companies are large-cap (Market Capitalization greater than $10 billion).
YTD, Fujifilm is up 22.46% and there is optimism that it will continue to grow. Our Zacks Consensus Estimates call for the company’s current quarter earnings to jump 108.6%, along with 10.4% revenue growth. Following this growth, Fujifilm’s fiscal 2020 EPS is expected to surge 17.4%, coupled with further slight revenue growth.
NXP develops semiconductors for a variety of industries and is based in Eindhoven, Netherlands. NXP announced early Wednesday that they would be paying around $1.76 billion for Marvell Technology’s Wi-Fi and Bluetooth business. Additionally, Zacks Consensus Estimates has NXP earnings growth at 41.6% year over year for fiscal 2019 followed by 18% earnings expansion, along with a 7% revenue increase, for fiscal 2020.
Taiwan Semiconductor Manufacturing Company (TSM - Free Report)
Zacks Rank: #2 (Buy)
Taiwan Semiconductor is the largest dedicated independent semiconductor foundry in the world and provides services to many semiconductor companies including some on this list. TSM has been hit especially hard by the trade war with China. After reaching an all-time high of $45.64 in mid-April, the stock has fallen 13.2% over the past month.
Much of this slip is due to Huawei being blacklisted by the US. Although the company claims its business with Huawei does not fall under the US restrictions, investors have become wary of taking a position in the stock. All that being said, now may be a great opportunity to take a position in the company as an improvement in US-China relations may provide a boost to the stock and Zacks Consensus Estimates calls for TSM to post 18% year over year EPS growth in fiscal 2020.
XILINX Inc
Zacks Rank: #2 (Buy)
Another Silicon Valley semiconductor company, Xilinx Inc is a major supplier of programmable logic devices. Xilinx stock is up just over 23% YTD and has an "A" for Growth in our Zacks Style Scores system. Its growth over the past 6 months has been consistent with the exception of a slip after the company’s earnings call in April. Xilinx is still below the high it hit before that slip, but seems to be capable of continuing its growth given our Zacks Consensus Estimates, which calls for year over year EPS growth of 14% in both fiscal 2019 and fiscal 2020.
AMD is a semiconductor company primarily working with computer related products. AMD has done significantly better than the semiconductor market and S&P 500 over the past two years. This was primarily due to investor expectation of a new computer processor that would supposedly surpass those made by Intel (INTC - Free Report) in terms of performance. Following the announcement of their new product, the Ryzen 3000 line of processors, on Sunday, AMD’s stock opened after the holiday weekend up 5% and peaked at $29.58 a share on Tuesday, a nearly 12% gain from its Friday close. Since Tuesday, it has slipped slightly to $28.29.
Intel has tended to be the superior and more popular brand throughout the 50-year battle between the companies, but with AMD’s new product line it is ahead of Intel technologically and may become more profitable for investors if they can keep ahead of Intel. Estimates for AMD’s earnings next fiscal year have had 7 upward revisions over the past 60 days, compared with only 2 downwards revisions. Overall AMD has done significantly better than its industry and the S&P YTD and with these revisions it seems that some analysts believe AMD will keep up the positive trend.
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Image: Bigstock
5 Large-Cap Semiconductor Stocks to Buy Right Now
The semiconductor market has historically been highly cyclical as it is closely connected to various other markets. This normal fluctuation along with the current trade war with China has created a market that has done significantly worse than the S&P YTD. That being said, here are some semiconductor stocks that seem to be outperforming the market given the current situation.
All 5 stocks in this article have a Zacks Rank #2 (Buy) or better, with the sole exception of Advanced Micro Devices (AMD - Free Report) . Additionally, all companies are large-cap (Market Capitalization greater than $10 billion).
Fujifilm Holdings Corp (FUJIY - Free Report)
Zacks Rank: #2 (Buy)
YTD, Fujifilm is up 22.46% and there is optimism that it will continue to grow. Our Zacks Consensus Estimates call for the company’s current quarter earnings to jump 108.6%, along with 10.4% revenue growth. Following this growth, Fujifilm’s fiscal 2020 EPS is expected to surge 17.4%, coupled with further slight revenue growth.
NXP Semiconductor N V (NXPI - Free Report)
Zacks Rank: #2 (Buy)
NXP develops semiconductors for a variety of industries and is based in Eindhoven, Netherlands. NXP announced early Wednesday that they would be paying around $1.76 billion for Marvell Technology’s Wi-Fi and Bluetooth business. Additionally, Zacks Consensus Estimates has NXP earnings growth at 41.6% year over year for fiscal 2019 followed by 18% earnings expansion, along with a 7% revenue increase, for fiscal 2020.
Taiwan Semiconductor Manufacturing Company (TSM - Free Report)
Zacks Rank: #2 (Buy)
Taiwan Semiconductor is the largest dedicated independent semiconductor foundry in the world and provides services to many semiconductor companies including some on this list. TSM has been hit especially hard by the trade war with China. After reaching an all-time high of $45.64 in mid-April, the stock has fallen 13.2% over the past month.
Much of this slip is due to Huawei being blacklisted by the US. Although the company claims its business with Huawei does not fall under the US restrictions, investors have become wary of taking a position in the stock. All that being said, now may be a great opportunity to take a position in the company as an improvement in US-China relations may provide a boost to the stock and Zacks Consensus Estimates calls for TSM to post 18% year over year EPS growth in fiscal 2020.
XILINX Inc
Zacks Rank: #2 (Buy)
Another Silicon Valley semiconductor company, Xilinx Inc is a major supplier of programmable logic devices. Xilinx stock is up just over 23% YTD and has an "A" for Growth in our Zacks Style Scores system. Its growth over the past 6 months has been consistent with the exception of a slip after the company’s earnings call in April. Xilinx is still below the high it hit before that slip, but seems to be capable of continuing its growth given our Zacks Consensus Estimates, which calls for year over year EPS growth of 14% in both fiscal 2019 and fiscal 2020.
Advanced Micro Devices Inc. (AMD - Free Report)
Zacks Rank: #3 (Hold)
AMD is a semiconductor company primarily working with computer related products. AMD has done significantly better than the semiconductor market and S&P 500 over the past two years. This was primarily due to investor expectation of a new computer processor that would supposedly surpass those made by Intel (INTC - Free Report) in terms of performance. Following the announcement of their new product, the Ryzen 3000 line of processors, on Sunday, AMD’s stock opened after the holiday weekend up 5% and peaked at $29.58 a share on Tuesday, a nearly 12% gain from its Friday close. Since Tuesday, it has slipped slightly to $28.29.
Intel has tended to be the superior and more popular brand throughout the 50-year battle between the companies, but with AMD’s new product line it is ahead of Intel technologically and may become more profitable for investors if they can keep ahead of Intel. Estimates for AMD’s earnings next fiscal year have had 7 upward revisions over the past 60 days, compared with only 2 downwards revisions. Overall AMD has done significantly better than its industry and the S&P YTD and with these revisions it seems that some analysts believe AMD will keep up the positive trend.
The Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.
These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.
Click here to see these breakthrough stocks now >>