The semiconductor stocks are on bullish radar this year following 5G and other infrastructure investments.
The semiconductor stocks were expected to have a poor year amid the trade war with China and the global pandemic. However, the companies from the semiconductor segment kept on performing with notable growth.
The new technologies are accelerating more than ever and 5G is one of the fastest-growing technology in the world. The bullish sentiment will continue to upsurge in 2021 following the advancement of 5G and other technological advancements such as the integration of cloud services.
Moreover, the rising trend of online gaming and cloud computing is also rising quite rapidly. This has developed a path for the semiconductor and semiconductor equipment market. So, the semiconductor stocks are a healthy bet for the investment this year. Let’s have a look at the three top semiconductor stocks to buy now.
The semiconductor giant, Nvidia (NVDA) is cursing towards the buy point ahead of its fiscal fourth-quarter earnings report. Investor’s Business Daily reported that IBD MarketSmith charts show NVDA stock has formed a flat base with a buy point of 587.76, over the past 13 weeks.
In the fiscal Q3 2020, the company reported data center sales of $1.9 billion, up by 162% year-over-year. The revenues skyrocketed 57% to$4.7 billion, with a gross margin of more than 63%. While the net profits were around $1.3 billion.
The demand for chips and semiconductor products is high with people buying more laptops and gaming PCs during the pandemic. As we move forward, the production scale is going to increase—aiming for the high market demand. So, Nvidia (NVDA) is a potential option for investing in semiconductor stocks this year.
Broadcom (AVGO) is a global developer, designer, and supplier of analog semiconductor devices. The company reported 11.9% growth and 56.3% net income growth in Q4 results. The company has been on a roll and is continuing the strong growth from last year.
The company reported $6.35 per share earnings, beating the expected earnings of $6.26. Broadcom is on a bullish radar and Zacks anticipate a +1.39% in the EPS for the recent quarter.
While analyst Angelo Zino says that there will be an improvement in enterprise data center spending in the first half of the year. Adding on, he said that cloud spending should remain elevated for the time being.AVGO stock is rated as a buy with a price target of $510, by CFRA.
Skyworks Solutions (SWKS)
Skyworks Solutions (SWKS) is a diversified chipmaker, tightly tethered to Apple. The company generated around 56% of its revenue from Apple in fiscal 2020.
Skyworks mostly expects its share gains from the 5G devices, which are coming in the market in large numbers now. Analyst Zino believes that the transition to 5G technology will be a tremendous bullish catalyst for the stock. Moreover, SWKS shares have a notable valuation, which is priced at only around 20 times forward earnings.
While the company has zero debt and approximately $1 billion in cash. The company has long-term opportunities that would drive the stock’s price. So, SWKS is another big gun that is in the buy range at the moment.