By MarketBeat. Originally published at ValueWalk.
These 3 Semi Stocks Should Be On Your Radar
Finding valid reasons to invest in semiconductor stocks is certainly not difficult. These tiny chips are critical for powering up some of the most exciting technology today, including smartphones, data centers, and even electric vehicles. Then you have the global semiconductor shortage that has caused the worldwide demand for these powerful products to increase dramatically. While this shortage will potentially limit growth for semi companies in the near term, it’s hard to not be upbeat about the future of this industry over the next decade.
Q4 2021 hedge fund letters, conferences and more
Semi stocks have pulled back considerably to start the year 2022, which means investors that have been waiting for an appealing entry point should be ready to pounce on pullbacks. There are plenty of appealing semiconductor companies to choose from at this time, but a few stand head and shoulders above the rest. That’s why we’ve put together the following list of 3 stellar semi stocks to buy now. Let’s take a deeper look below.
Advanced Micro Devices (NASDAQ:AMD)
This is one of the more intriguing growth stories in the semiconductor space at this time, as Advanced Micro Devices has been taking plenty of market share from its competitor Intel and is making savvy investments to further strengthen its market position with acquisitions like the recent deal for Xilinx. As a leading supplier of microprocessors and graphics semiconductors used in computers, data centers, video game systems, and more, the company offers exposure to some of the most exciting areas of the tech sector. There’s also a lot to like about how AMD uses Taiwan Semiconductor Manufacturing Corporation to handle its manufacturing, particularly since Intel has been dealing with plenty of manufacturing issues in recent quarters.
AMD’s data center servers are driving impressive earnings growth for the company, and with new products like the Ryzen 6000 series CPUs and 3 new Radeon GPUs, investors should be excited about the direction that this company is heading. AMD also reported revenue of $4.83 billion in Q4, up 49% year-over-year and 12% sequentially, and provided very impressive Q122 forward guidance. Although the stock has struggled to regain the 200-day moving average in recent sessions, any move above this all-important resistance level could mark the start of a new rally.
GlobalFoundries Inc (NASDAQ:GFS)
This is a semiconductor stock that many investors might not be familiar with, as GlobalFoundries went public back in October of 2021. However, with the way shares are outperforming lately, it could be a name that we hear more and more about in the coming months. With semiconductor demand expected to remain steady for the foreseeable future, owning shares of a company that handles the manufacturing side of things might be a fantastic idea. GlobalFoundries operates as a semiconductor foundry and manufactures a variety of semi devices, including microprocessors, mobile application processors, baseband processors, and more.
This company was actually created by the divestiture of the manufacturing arm of the aforementioned AMD back in 2009, which means that GlobalFoundries has a long history of success in the industry. It’s worth noting that GlobalFoundries reported record revenue of $1.85 billion in Q4, up 9% sequentially, and saw its 2021 revenue jump by 36% year-over-year to hit $6.6 billion. This tells investors that business is booming thanks to the chip shortage, and with 30 customers committing more than $3.2 billion toward the continued expansion of GlobalFoundries’ global manufacturing footprint to support strong demand, the stage is set for this company to truly become a dominant force.
Broadcom (NASDAQ:AVGO)
Finally, we have this leading fabless semiconductor company that has a very strong position in wired and wireless communications, enterprise data center and storage, and industrial end markets. Broadcom is a great long-term pick for any portfolio thanks to an appealing valuation, strong demand from cloud and enterprise customers, and an attractive dividend yield of 2.68&. The company also offers a way to capitalize on the growth of the smartphone industry, as roughly 20% of Broadcom’s sales are generated in that space.
If you’re going to stick with a semi stock for the long haul, it pays to invest in the market leaders. That’s the case with Broadcom, as the company is a leader in WiFi chips, networking switches, enterprise storage chips, and more. The company recently announced that Q1 sales were up 16% year-over-year to $7.7 billion, and demand for Broadcom’s networking products should help the company post extremely solid numbers this year.
Should you invest $1,000 in Broadcom right now?
Before you consider Broadcom, you’ll want to hear this.
MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Broadcom wasn’t on the list.
While Broadcom currently has a “Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.
Article by Sean Sechler, MarketBeat
Updated on
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