3 Semiconductor Stocks Outperforming NVIDIA in 2021

3 Semiconductor Stocks Outperforming NVIDIA in 2021

Posted On March 4, 2021 1:13 am

The new normal, with its growing dependence on technology during the COVID-19 pandemic, has done wonders for the semiconductor industry. Advanced chipsets, which power IT products and devices, have seen heavy demand—and not just for consumer electronics; demand for processors is emanating from segments including electric vehicles, 5G, and cloud computing.

As one of the world’s leading chipmakers, Nvidia Inc. (NVDA – Get Rating) has witnessed strong demand in the GPU space amid the pandemic. During the fourth quarter, ended January 31, NVDA’s revenue climbed 61% year-over-year to $5 billion and exceeded analyst expectations. Investors were also hopeful that the company would gain  from selling cryptocurrency-oriented cards to industrial miners.

However, NVDA’s CEO Jensen Huang downplayed the company’s cryptocurrency activity, noting that, “We expect that to be a small part of our business as we go forward.” Also, the company’s $40 billion ARM acquisition is being scrutinized by the European Union and the U.K. Hence, NVDA has a level of uncertainty surrounding it.

Therefore, we think investors seeking to extract gains from semiconductor stocks should  look at companies such as Intel Corporation (INTC – Get Rating), Micron Technology, Inc. (MU – Get Rating), and Skyworks Solutions, Inc. (SWKS – Get Rating) that have clearer growth prospects. These stocks performed consistently well last year and could outdo NVDA through the remainder of this year.

Click here to checkout our Semiconductor Industry Report for 2021

Intel Corporation (INTC – Get Rating)

INTC is a global semiconductor leader that  develops and markets  solutions for the cloud, smart, and connected devices for retail, industrial, and consumer uses. DCG, IOTG, Mobileye, NSG, PSG, CCG are the segments in which the company operates. The company also provides Internet of Things (IoT) products that include high-performance computing solutions for targeted verticals and  embedded applications.

During the fourth quarter, ended December 31, 2020, INTC’s revenue fell 1% year-over-year to $20 billion. Its EPS for the quarter declined to $1.42 from $1.58 posted in the same period last year. INTC’s data-centric business unit’s revenue declined  11% year-over-year, while its PC-centric business climbed 9% to $10.9 billion. The company has begun production of 10nm-based 3rd Gen Intel® Xeon® Scalable processors (“Ice Lake”). It has also ventured into the discrete graphics market with Intel® Iris® Xe MAX graphics, its first Xe-based discrete GPU.

Analysts expect the company’s revenue for the quarter ending March 31, 2021 to be $17.5 billion, representing  an 11.5% year-over-year decline. Its EPS is likely to grow at the rate of 5.4% per annum over the next five years.

INTC has climbed 26% on a year-to-date basis to close yesterday’s trading session at $61.24. Over the past six months, the stock gained 23.8%.

INTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

INTC has an A grade for Value and Quality, and a B grade for Sentiment and Momentum. Of the 99 stocks in the B-rated Semiconductor & Wireless Chip industry, it is ranked #15.

In addition to the POWR Ratings grades I’ve just highlighted, you can see INTC ratings for Growth and Stability, here.

Micron Technology, Inc. (MU – Get Rating)

MU is involved in designing, manufacturing, and selling  memory and storage products globally. Its Compute and  Networking Business Unit, Mobile Business Unit, Storage Business Unit, and Embedded Business Unit are the four segments through which the company operates. Memory products for the cloud server, client, graphics, enterprise, and networking markets, are some of the products that MU produces.

In February, MU announced the appointment of Linnie Haynesworth to its board of directors. Haynesworth brings in more than 30 years of experience in technology, including aerospace and cybersecurity.

During the first quarter, ended December 2020, MU’s revenue…

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