4 Trending Semiconductor Stocks To Watch In The Stock Market Now
Semiconductor stocks are stocks of businesses that manufacture chips for electronic devices. The semiconductor industry has been one of the fastest-growing industries in the world for several decades and is expected to continue to grow in the coming years. In fact, fueling the surge in demand is the continued expansion of 5G networks, which require large numbers of semiconductor chips. In addition, semiconductors are used in a wide range of consumer electronics, including smartphones, laptops, and gaming consoles. With global demand for these products remaining strong, it wouldn’t surprise me if investors were paying close tabs on the semiconductor industry right now.
Let’s not forget about The Chips and Science Act of 2022. Recently, President Biden signed off on The Chips and Science Act. In detail, the law provides $52.7 billion in subsidies over the next five years to increase U.S. semiconductor chip production. On top of that, the law includes a 25% investment tax credit for semiconductor plants. This is estimated to be worth approximately $24 billion over the next ten years. As a result, this act looks to accelerate the production of chips in the United States. In brief, currently, the U.S. only produces nearly 10% of the global supply of semiconductors. Meanwhile, East Asia amounts to 75% of the world’s production.
Some semiconductor firms that will likely benefit from this act are names such as Intel Corporation (NASDAQ: INTC) and Micron Technologies Inc. (NASDAQ: MU) to name a few. All in all, there seems to be a positive sentiment surrounding the future of semiconductor companies in the U.S. With that being said, here are four top semiconductor stocks to watch in the stock market today.
Semiconductor Stocks To Watch Right Now
- NVIDIA Corporation (NASDAQ: NVDA)
- Texas Instruments Incorporated (NASDAQ: TXN)
- ON Semiconductor Corporation (NASDAQ: ON)
- Taiwan Semiconductor Manufacturing Co. Ltd (NYSE: TSM)
NVIDIA (NVDA Stock)
NVIDIA Corporation is an American multinational technology company headquartered in Santa Clara, California. The company designs graphics processing units (GPUs) for the gaming and professional markets. They also design system-on-a-chip units (SoCs) for the mobile computing and automotive markets. Notably, the company’s primary GPU product line is their NVIDIA GeForce. Furthermore, NVIDIA produces chipsets used for a variety of purposes. This includes general computing, video encoding, and decoding, power management, and others.
In July, the company pre-announced its Q2 2022 fiscal revenue to come in under previous expectations. In detail, NVIDIA reported its revenue in the second quarter of $6.7 billion. This is compared with its previous outlook the company provided of $8.1 billion for the quarter. This is largely contributed to fewer-sell-in of gaming products, which represents a decline in channel partner sales likely as a result of macroeconomic headwinds.
Colette Kress, EVP, and CFO of NVIDIA stated, “The significant charges incurred in the quarter reflect previous long-term purchase commitments we made during a time of severe component shortages and our current expectation of ongoing macroeconomic uncertainty. We believe our long-term gross margin profile is intact. We have slowed operating expense growth, balancing investments for long-term growth while managing near-term profitability.” Shares of NVDA stock are up over 11% in the last month of trading action, despite still being down 37% year-to-date. Given all the activity surrounding chipmakers, is NVDA worth the watch right now?
Texas Instruments (TXN Stock)
Texas Instruments Incorporated (TI) is an American technology company that designs and manufactures semiconductor and computing products. The company is headquartered in Dallas, Texas, with operations in more than 30 countries. TI is one of the largest manufacturers of chips for mobile devices and the automotive industry. The company also offers a wide range of other products, including calculators, digital light processors (DLP), and microcontrollers. In addition to its product portfolio, TI is also a leading provider of research and development services. The company’s scientists and engineers have made significant contributions to the fields of semiconductor manufacturing, wireless communications, and signal processing.
Moving along, last month Texas Instruments (TXN) reported stronger-than-expected second-quarter 2022 financial results. Diving in, TXN posted earnings of $2.45 per share, along with revenue of $5.2 billion. Wall street’s consensus earnings estimate was $2.07 per share on revenue of $4.6 billion. In addition, the company provided guidance estimates for its third-quarter earnings. In detail, TXN announced they estimate earnings of $2.23 to $2.51 per share on revenue of $4.90 billion to $5.30 billion. For clarity, analysts’ consensus earnings estimate is $2.19 per share on revenue of $4.98 billion.
Rich Templeton, TI’s chairman, president, and CEO commented in his letter to shareholders, “Our cash flow from operations of $8.7 billion for the trailing 12 months again underscored the strength of our business model. Free cash flow for the same period was $5.9 billion and 30% of revenue. This reflects the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter production.” As such, shares of TXN stock are up over 8% in the last month of trading action. TXN stock currently trades at $178.46 per share as of Thursday’s closing bell.
ON Semiconductor Corporation (ON Stock)
Next up, is ON Semiconductor Corporation ( ON ). On Semiconductors is a leading semiconductor supplier that offers technologies addressing industrial, automotive, consumer, medical, and communications markets. The company’s breadth of solutions includes power management, sensors, and sensor interfaces, integrated circuits (ICs), discrete components, and custom devices. ON has a diverse customer base, which includes some of the world’s largest original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) providers.
Earlier this month On Semiconductor (ON) reported better-than-expected second-quarter June 2022 earnings. In specific, the company posted earnings of $1.34 per share on revenue of $2.1 billion. Wall Street consensus earnings estimate was $1.26 per share on revenue of $2.0 billion. Impressively, the company reported a 24.9% increase in revenue during the same period in 2021. Also in the report, ON Semiconductor provided guidance for Q3 earnings. In detail, the company is estimating earnings in the range of $1.25 to $1.37 per share, on revenue of $2.07 billion to $2.17 billion. As a result, shares of ON stock are up over 24% in the last month of trading, closing Thursday’s session at $73.25 a share. Considering all this, do you think ON stock is a buy right now?
Taiwan Semiconductor Manufacturing Ltd. (TSM Stock)
Last but not least, Taiwan Semiconductor Manufacturing is the largest semiconductor foundry in the world. Actually, the company is a leading provider of application-specific integrated circuits (ASICs). Moreover, TSM offers a comprehensive portfolio of technologies and services. In fact, TSM has been at the forefront of technology development for over three decades. As a result, the company is now a major player in the global semiconductor industry.
Last month, TSM reported stronger-than-expected second quarter financial results. Diving in, the company recorded a revenue increase of 37% year-year-over to $18.16 billion. This beat analysts’ expectations by $580 million. In addition, the company posted earnings of $1.55 per share on revenue of $18.2 billion for the quarter. Also, TSM raised its revenue outlook for the full year. The report displayed a boost in results from strong markets for IoT chips & automotive. With that, is TSM on your radar right now?