The semiconductor industry is projected to expand by 13.9% to finish 2022. According to statistics, the value of the chip market will reach $662 billion in 2023. Taking geography into account, the industry should expand rapidly in the Americas, at a pace of 23.5% year-over-year, and then in Japan, at 14.2%. Other significant development areas will likely include Europe, where growth is predicted to increase by 14% annually, and the Asia Pacific region, which is anticipated to increase by 10.5% by the end of 2022.
Although the industry’s prospects are promising, it will encounter challenges in 2022 and 2023. Its growth trajectory is vulnerable due to Fed tightening and surging prices. Semiconductor stocks are expected to decline slightly more before bouncing back as customers lose buying power because of increased pricing. Therefore, it’s a good idea to buy and hold the best semiconductor stocks now while the prices are down, yielding an opportunity to experience growth for yourself over some time as the economy recovers.
Join me while I break down the three tickers I like the most based on their track records and analyst sentiment. The experts agree that these can be timely, intelligent investments:
STMicroelectronics NV (STM)
STMicroelectronics NV (STM) designs, develops, manufactures, and distributes products for analog, digital, and mixed-signal applications, including standard commodity components, application-specific integrated circuits, complete bespoke devices, and semi-custom devices. STM sells smart power devices for the industrial, computer, and consumer industries and touch screen controllers. STM specializes in low-power connection and metering solutions for innovative grid applications, all MEMS (microelectromechanical) devices, and EEPROM (electrically erasable programmable read-only memory). STM was established in June 1987 and is based in Plan-Les-Ouates, Switzerland.
STM recently reported EPS for Q2 of $0.92 per share, above projections by $0.12. STM‘s sales for the quarter came in at $3.84 billion, exceeding estimates by $81.7 million and increasing by 28.24% year-over-year. STM raised its revenue forecast for the fiscal year, moving from its previous range of $14.8 billion to $15.3 billion to a range of $15.9 billion to $16.2 billion. Wall Street experts predict STM will make about $15 billion in revenue this year. STM currently has a dividend yield of 0.86%, with a quarterly payout of 8 cents per share. Year-over-year, STM impresses in key spots: Revenue – 28.24%; Net Income – 110.44%; EPS – 109.09%; Net Profit Margin – 64.12%. The consensus price goal for STM from analysts is 48.75, with a high of 74.00 and a low of 24.37. The median estimate is a 39% increase over its last price, and STM comes with a very strong buy rating.
Lam Research Corp (LRCX)
Lam Research Corporation (LRCX) is a semiconductor processing equipment manufacturer that designs, produces, distributes, and maintains semiconductor equipment for manufacturing integrated circuits. LRCX offers SPEED (Systems Planning, Engineering, and Evaluation Device) gap fill high-density plasma chemical vapor deposition products and Striker single-wafer atomic layer deposition products. LRCX also provides “Flex” for dielectric etching, Syndion for through-silicon through etching, and Versys metal products for metal etching. The firm distributes its products and services to the semiconductor sector globally. LRCX was founded in 1980 and is based in Fremont, California.
LRCX announced the financial results of its 2022 fiscal fourth quarter. EPS for LRCX came in at $8.83, which exceeded estimates by $1.50 per share. LRCX‘s quarterly sales of $4.64 billion, up 11.83% year-over-year, were $422 million more than expectations. LRCX forecasts EPS for Q1 of 2023 to be in the $8.75 to $10.25 range and sales to be between $4.6 billion and $5.2 billion. Wall Street anticipates LRCX to generate $4.63 billion in revenue and $8.82 per share in earnings. Until reporting again, LRCX shows $4.9 billion in sales at a robust EPS of $9.56 per share. Year-over-year, LRCX shows revenue growth of 11.83% and EPS growth of 9.52%. LRCX presently offers a dividend yield of 1.59%, with a quarterly payout of $1.72 per share. The consensus annual price target for LRCX from the analysts providing estimates is 550.00, with a high of 800.00 and a low of 450.00. The forecast is a 24.91% increase over current pricing, and LRCX comes with a confident buy rating
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Applied Materials Inc (AMAT)
Applied Materials, Inc (AMAT) manufactures equipment, offers services, and develops software for semiconductors, displays, and related sectors. AMAT’s Semiconductor Systems segment includes tools for etch, quick thermal processing, chemical mechanical planarization, wafer packing, and ion implantation. AMAT provides products for producing liquid crystal displays, organic light-emitting diodes, equipment upgrades, and other display technologies for televisions, monitors, laptops, PCs, smartphones, and other consumer-oriented devices. AMAT was started on November 10, 1967, and is based in Santa Clara, California.
AMAT announced profits during its third fiscal quarter of 2022 that outperformed the market. EPS came in at $1.94 per share, above expectations by $0.05. AMAT‘s sales came in at $6.52 billion, exceeding estimates by $252 million and up 5.23% year-over-year. For its current quarter, AMAT shows revenue of $6.7 billion, with an EPS of $2.01 per share. Annual growth for EPS is forecasted at 12.63%, and revenue growth is expected to be 11.41%. AMAT currently has a dividend yield of 1.12%, with a quarterly payout of 26 cents per share. The price target for AMAT from analysts providing yearly predictions is 125.50, with a high estimate of 184.00 and a low of 95.00. The median price target is a 33.43% increase from its most recent price, and AMAT’s buy rating comes with solid acclaim from economists.
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