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The Zacks Analyst Blog Highlights: NVIDIA, QUALCOMM, Lattice Semiconductor, ON Semiconductor and Advanced Micro Devices

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  • NVDA
  • QCOM
  • LSCC
  • ON
  • AMD
  • ^GSPC

For Immediate Release

Chicago, IL – November 22, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA Corporation NVDA, QUALCOMM Inc. QCOM, Lattice Semiconductor Corporation LSCC, ON Semiconductor Corporation ON and Advanced Micro Devices Inc. AMD.

Here are highlights from Friday’s Analyst Blog:

5 Must-Buy Technology Stocks Flying High -- with More Upside

Wall Street has maintained its impressive northbound journey so far this year after completing an astonishing bull run in 2020. However, the U.S. stock market’s driver has changed. In 2020, the technology sector drove Wall Street to get rid of the pandemic-led historically shortest bear market and formed a new bull market. In 2021, the cyclical sectors like financials, industrials, energy, materials and consumer discretionary took center stage.

Yet, a close look at Wall Street’s performance reveals that the technology sector is flourishing in most parts of 2021. Within the technology space, the semiconductor industry has performed even better. We have selected five semiconductor stocks with strong potential. These are — NVIDIAQUALCOMMLattice SemiconductorON Semiconductor and Advanced Micro Devices.

Technology Sector Thriving in 2021

In 2020, the technology sector drove Wall Street to get rid of the pandemic-led historically shortest bear market and formed a new bull market. Overvaluation of the technology sector, faster-than-expected reopening of the economy and higher inflation shifted investors’ focus toward the cyclical sectors like financials, industrials, energy, materials and consumer discretionary.

However, the technology sector regained market participants' confidence in the past six months. Year to date, the market's benchmark — the S&P 500 Index — rallied 25.3% while the technology sector jumped 30.8%. In the past month the S&P 500 gained 4.9% while the technology sector advanced 8.2%.

Moreover, the tech-laden Nasdaq Composite Index is up 24.1% year to date, surpassing the Dow, which has risen 17.2% in the same time period. Notably, the Dow is inclined toward reopening stocks.

Within the technology sector, the semiconductor industry has performed more impressively. Prolonged shortage of chipsets owing to the pandemic-led destruction of the global supply-chain system bodes well for the industry. The Philadelphia Semiconductor Index SOX has rallied 39.5% year to date. On Nov 18, the index reached a fresh all-time high of 3,916.92 and a new closing high of 3,899.96.

Future Catalyst for Semiconductor Industry

On Nov 4, Bloomberg reported citing a National Security Council official that the White House is pressing U.S. Congress to quickly pass legislation providing $52 billion to help computer chip manufacturers and ease a shortage of components vital for a range of industries.

The Biden administration has expressed concern that the United States had a 37% share of the global semiconductor and microelectronic production in 1990, which has drastically dropped to just 12% as of now. Consequently, U.S. businesses, especially the auto and high-tech industries are suffering from an acute shortage of chipsets owing to the breakdown of the global supply chain during the pandemic.

Additionally, the Asian giant China is aggressively spending more than $150 billion to boost semiconductor manufacturing and unsettle the United States from its global leadership in this key technology. These show the urgency of the White House to strengthen its high-tech semiconductor industry.

Our Top Picks

We narrowed our search to five semiconductor stocks that have surged nearly 25% or more in the past month. These stocks have strong growth potential for the rest of 2021 and have seen positive earnings estimate revision. Finally, each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA Corp. is benefiting from the coronavirus-induced work-from-home and learn-at-home wave. NVDA is also benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, a surge in Hyperscale demand remains a tailwind for NVIDIA’s Data Center business.

The expansion of NVIDIA GeForce NOW is expected to drive user base. Further, the solid uptake of artificial intelligence-based smart cockpit infotainment solutions is a boon. The collaboration with Daimler-owned Mercedes-Benz is expected to further strengthen NVIDIA’s presence in the autonomous vehicles and other automotive electronics spaces.

Zacks Rank #2 NVDA has an expected earnings growth rate of 65.6% for the current year (ending January 2022). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. The stock price of NVIDIA has soared 42.1% in the past month.

ON Semiconductor Corp. is seeing strengthening demand across most end markets as evident from its booking trends over the last few quarters. ON Semiconductor continues to gain traction among electric vehicle manufacturers for both silicon carbide and insulated-gate bipolar transistor-based products.

ON Semiconductor has a well-diversified business generating a significant percentage of revenues from each of the computing, consumer, industrial, communications and automotive end markets.

Zacks Rank #1 ON Semiconductor has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.9% over the last 30 days. The stock price of ON Semiconductor has jumped 41.2% in the past month.

Qualcomm Inc. is well-positioned to benefit from a solid 5G traction with greater visibility to meet its long-term revenue targets. For calendar-year 2021, 5G handsets with QCOM chip are expected to witness 150% year-over-year growth at the midpoint to about 450-550 units.

Qualcomm has raised the bar for driverless cars with the launch of the first-of-its-kind automotive platform — Snapdragon Ride — which enables automakers to transform their vehicles into self-driving cars using AI.

Zacks Rank #2 QCOM has an expected earnings growth rate of 23.1% for the current year (ending September 2022). The Zacks Consensus Estimate for current-year earnings improved 1.1% over the last 7 days. The stock price of QUALCOMM has climbed 40.6% in the past month.

Advanced Micro Devices Inc. is riding on robust performance from the Computing and Graphics, and Enterprise Embedded and Semi-Custom segments. AMD is benefiting from strong sales of its Ryzen and EPYC server processors, owing to the increasing proliferation of AI and Machine Learning in industries like cloud, gaming and supercomputing.

Growing clout of 7 nanometer products in the data center vertical, driven by work-from-home and online learning trends, is a key catalyst. Advanced Micro Devices has raised its 2021 guidance for revenues on the back of strong growth across all businesses.

Zacks Rank #2 AMD has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 5.4% over the last 30 days. The stock price of Advanced Micro Devices has appreciated 33.2% in the past month.

Lattice Semiconductor Corp. develops and sells semiconductor technologies in Asia, Europe and the Americas. LSCC offers field-programmable gate arrays that consist of four product families, including the Certus-NX and ECP, MachXO, iCE40, and CrossLink.

Lattice Semiconductor also provides video connectivity application-specific standard products. In addition, the company licenses its technology portfolio through standard IP and IP core licensing, patent monetization, and IP services. LSCC primarily serves original equipment manufacturers in the communications and computing, consumer, and industrial and automotive end markets.

Zacks Rank #2 LSCC has an expected earnings growth rate of 47.8% for the current year. The Zacks Consensus Estimate for current-year earnings improved 75.4% over the last 30 days. The stock price of Lattice Semiconductor has surged 24.9% in the past month.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
 
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