For investors looking for near-term protection, Credit Suisse analysts said wireless-device specialist Qualcomm was their top pick.
Dreamstime
Semiconductor stocks have fallen far enough to present a long-term opportunity in companies with growth opportunities and depressed valuations, according to analysts at
Semiconductor stocks have been hit hard recently by warnings of slowing spending, weaker demand for devices such as personal computers, and the risk that U.S.-China tension will snarl supply chains. Offsetting that has been this week’s news of a high-profile investment by Warren Buffett’s
Credit Suisse analysts led by Chris Casso initiated coverage of the semiconductor devices sector on Tuesday with an Overweight rating overall. They argue “there has been enough bad news” to lower the risk of investing despite the possibility that the economy will weaken further.
For investors looking for near-term protection, the Credit Suisse analysts said wireless-device specialist
now trades at 13.5 times its projected 2023 earnings on Credit Suisse forecasts, making it relatively inexpensive compared with other companies in the sector.
They initiated coverage of Qualcomm with an Outperform rating and $150 target price. Qualcomm shares were at around $125 in premarket trading on Wednesday.
is set to report earnings after the close on Wednesday, having cut its financial forecasts multiple times over the past several months.
“We believe NVDA has the best growth prospects in semis [semiconductors], due to their dominance of AI and the expected growth rate of AI throughout data center markets,” the Credit Suisse analysts wrote.
Credit Suisse has an Outperform rating and $210 target price on
(TXN) to a Neutral rating from Outperfom previously, with a target price of $205.
“TXN’s large exposure to industrial makes it very challenging to identify the “real” level of demand, since the significant shortages that occurred over the last year gave customers every incentive to have built inventory where they could,” the analysts wrote.
Qualcomm, Nvidia Are Top Picks Among Semiconductor Stocks, Analyst Says
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For investors looking for near-term protection, Credit Suisse analysts said wireless-device specialist Qualcomm was their top pick.
Dreamstime
Semiconductor stocks have fallen far enough to present a long-term opportunity in companies with growth opportunities and depressed valuations, according to analysts at
Credit Suisse
.
Semiconductor stocks have been hit hard recently by warnings of slowing spending, weaker demand for devices such as personal computers, and the risk that U.S.-China tension will snarl supply chains. Offsetting that has been this week’s news of a high-profile investment by Warren Buffett’s
Berkshire Hathaway
(ticker: BRKA) in
Taiwan Semiconductor
(TSM).
Credit Suisse analysts led by Chris Casso initiated coverage of the semiconductor devices sector on Tuesday with an Overweight rating overall. They argue “there has been enough bad news” to lower the risk of investing despite the possibility that the economy will weaken further.
For investors looking for near-term protection, the Credit Suisse analysts said wireless-device specialist
Qualcomm
(QCOM) was their top pick. They noted that
Qualcomm
now trades at 13.5 times its projected 2023 earnings on Credit Suisse forecasts, making it relatively inexpensive compared with other companies in the sector.
They initiated coverage of Qualcomm with an Outperform rating and $150 target price. Qualcomm shares were at around $125 in premarket trading on Wednesday.
The analysts said
Nvidia
(NVDA) was their overall top pick, noting its strengths in scientific computing, artificial intelligence, and data science.
Nvidia
is set to report earnings after the close on Wednesday, having cut its financial forecasts multiple times over the past several months.
“We believe NVDA has the best growth prospects in semis [semiconductors], due to their dominance of AI and the expected growth rate of AI throughout data center markets,” the Credit Suisse analysts wrote.
Credit Suisse has an Outperform rating and $210 target price on
Nvidia
stock, up from $205 previously. Nvidia trades at around $163.
The analysts downgraded
Texas Instruments
(TXN) to a Neutral rating from Outperfom previously, with a target price of $205.
“TXN’s large exposure to industrial makes it very challenging to identify the “real” level of demand, since the significant shortages that occurred over the last year gave customers every incentive to have built inventory where they could,” the analysts wrote.
Texas Instrument shares trade at around $177.
The analysts assumed coverage of
Intel
(INTC) with a Neutral rating and $28 target price. They noted the company is likely to have to increase capital spending aggressively to match
Taiwan Semiconductor
and rival
Advanced Micro Devices
(AMD), pressuring its cash flow.
Intel
shares trade at around $31.
Write to Adam Clark at [email protected]
Source: https://www.barrons.com/articles/semiconductor-stocks-top-picks-51668608040?siteid=yhoof2&yptr=yahoo