Top Semiconductor Stocks To Watch During The Global Chip Shortage
2020 has been a banner year for semiconductor stocks in the stock market. But if you thought things would simmer down this year, think again. This is despite the chip shortages that’s been occurring globally. For the most part, the performance of chip stocks in the stock market has been nothing short of impressive. As demand remains strong for chips, things remain bright for this high-flying sector. This is because almost everything we use today is powered by semiconductors. While the global shortages of chips may be a disaster for many industries today, it also highlighted how dependent industries are on semiconductor companies to further digitization.
For instance, the rising popularity of cryptocurrencies such as Bitcoin has resulted in shortages of graphic cards as miners buy them in bulk. To cope with the rising demand, NVIDIA Corporation (NASDAQ: NVDA) had specifically come up with a new graphic processing unit (GPU). The company’s new GPU is a cryptocurrency mining processor. As the name suggests, it is specifically made for crypto miners.
Considering the hype of cryptocurrencies in the market these days, it’s safe to say that the cryptocurrency mining craze isn’t going away anytime soon. Recently, the rise in popularity of Chia Coin, a brand-new cryptocurrency that relies on storage for mining, could cause a shortage in solid-state drives (SSDs) and hard-disk drives (HDDs) across the globe. Even though Chia isn’t available for trading yet, miners in China are already mass purchasing SSDs and hard drives. The major reason behind the increased interest in Chia Coin is to make a more environmentally-friendly cryptocurrency. That said, the surge of demand for these products is likely to bode well for the companies manufacturing them. With all these in mind, do you have this list of top semiconductor stocks to buy in the stock market today?
Best Semiconductor Stocks To Watch In April
- Seagate Technology Plc (NASDAQ: STX)
- Western Digital Corp (NASDAQ: WDC)
- Micron Technology Inc (NASDAQ: MU)
- Dell Technologies Inc (NYSE: DELL)
Seagate Technology PLC
First up, we will be looking at Seagate Technology PLC. The company specializes in electronic data storage technology and solutions. Its principal products are HDDs. As some of you may be aware, the company will be reporting its fiscal third-quarter 2021 financials after the closing bell today. The company’s stock price has risen over 60% over the past year. With the increasing demand for HDDs and SSDs for Chia coin, could Seagate continue to benefit?
In March, Seagate launched an on-demand mass data transfer service for enterprises known as “Lyve”. In detail, Lyve serves to transfer large quantities of data across servers. “With only a fraction of enterprise data being put to work due to economics and storage complexities, Seagate has simplified how mass capacity data is securely captured, aggregated, transported, and managed,” said Jeff Fochtman, senior vice president of marketing. With such exciting developments, would you consider buying STX stock?
Western Digital Corp
Another company on our radar would be Western Digital. The company is a developer, manufacturer, and provider of data storage devices and solutions. Needless to say, this is a major infrastructure that enables the proliferation of data in many other industries. The company is known for its HDDs, NAND flash-based storage devices, SSDs, and enterprise storage platforms. Ahead of its earnings release on April 29, WDC stock received an upgrade from Susquehanna Financial Group analyst Mehdi Hosseini. In particular, he raised his price target from $100 to $124 on Monday, on expectations of higher profits.
In March, there were reports of Western Digital exploring a possible deal to acquire Japanese Chipmaker Kioxia Holding Corps. For those unfamiliar, Kioxia, formerly part of Toshiba, is the second-largest maker of NAND flash memory which is used in storage. Fewer players in the industry would mean better pricing power and more disciplined spending. Could Western Digital be eyeing to be the largest maker of NAND flash memory? Of course, it is worth pointing out that this is only a rumor at this point in time. Nevertheless, with digital memory storage hardware demand on the rise, would you be watching WDC stock?
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Micron Technology, Inc
Next up, we have another semiconductor giant, Micron. In detail, the company designs manufactures and sells memory and storage products worldwide. Its memory technology is also used in various applications such as 5G, automotive, mobile, and networking. For the past year, MU stock was among the top performers in the stock market, has doubled during this period.
In late March, Micron reported its financials for the quarter ended March 4, 2021. Its revenues came in 30% higher to $6.24 billion. On top of that, its net income increased 49% to $603 million. Micron also provided revenue guidance of $7.1 billion for the coming quarter, representing sequential growth of nearly 14%. This reflects the company’s continuous growth and rapidly improving market conditions. Furthermore, the company is confident it will benefit from the expansion of secular growth areas of technology, including 5G, AI, data centers, and more. Considering all these, do you think MU stock has a long growth runway ahead?
Dell Technologies Inc
I know what you are thinking. Dell isn’t exactly a semiconductor stock. You would probably know it for its desktops, notebooks, and tablets. In addition, it also has an Enterprise Solution Group (ESG) segment that includes servers, networking, and storage. DELL stock has seen an increase of over 150% in the past year. This is likely due to the increased demand for computers during the pandemic. After all, more people are working and learning from home before the economy reopens fully.
Last week, Dell announced its plan to spin off its majority stake in VMware (NYSE: VMW). Proceeds from the sale would bolster Dell’s financial position. Thus, it is not surprising why investors are cheering on the news. In February, the company announced its financials for the fiscal year ended January 29, 2021. Full-year revenue was a record $94.2 billion, an increase of 2% over the prior year. Also, Dell generated a record operating income of $5.1 billion. This is a staggering 96% rise over the prior year. In the fourth quarter itself, the company generated an operating income of $2.2 billion, a 204% increase over the same period last year. Safe to say, the company appears to be moving in the right direction as its products continue to be in demand. With all that in mind, do you think DELL stock can continue its recent momentum?