In this piece, we will take a look at the 10 semiconductor stocks to watch amid the Russia-Ukraine war. If you want to skip ahead to the top five stocks in this list, then head on over to 5 Semiconductor Stocks to Watch Amid Russia-Ukraine War.
Due to the near-ubiquity of information technology products in the modern world, the semiconductor industry has risen to become one of the most valuable and crucial industries globally. This is due to the fact that semiconductors, commonly referred to as ‘chips’ are necessary for powering every tech gadget – from smartphones to wearables, to notebooks and even large scale datacenters that lie at the heart of modern-day corporate functioning.
Therefore, chip companies have risen to become some of the most valuable firms in the world, and analysts and commentators have even started to call chips the ‘next oil’ due to their criticality in sustaining modern civilization. Every major country in the world is dependent on this crucial resource, whether for public, private, or corporate use. So, companies such as Intel Corporation (NASDAQ:INTC), NVIDIA Corporation (NASDAQ:NVDA) and the Taiwan Semiconductor Manufacturing Company (NYSE:TSM) are among those who see their products shipped globally.
The ongoing crisis in the Eastern European nation of Ukraine is having global implications. This is due to the fact that sanctions levied by the United States government against the Russian Federation have expanded their scope to cover the entire country and ensure that the Russian military and government cannot use American-origin products or products developed or designed with American products for their function. Naturally, given the prevalence of semiconductors in today’s global age, these sanctions will have implications on the semiconductor sector as well.
However, while the sanctions spell out disaster for Russia, they might also end up helping the everyday consumer. The semiconductor sector is still in the midst of a shortage due to excessive demand in the wake of the ongoing pandemic, and users have had to wait for months to get their hands on the latest products. Sanctions on the Russian Federation, if they end up in the chip companies completely suspending their sales to the country, will open up more products available for sale in other countries. Additionally, even if the Russian people are not directly targeted by the sanctions, rapid depreciation of the Russian Ruble will make most products out of reach for a large segment of the market.
electronics-6055226_1280
Our Methodology
In order to pick out the top stocks that you need to watch out for during the ongoing crisis, we took a broad look at the semiconductor sector and then honed down to the top ten firms that can be affected by the fallout of the American sanctions against Russia. We then analyzed the companies through their earnings reports, investor letters, analyst coverage, and hedge fund sentiment determined via Insider Monkey’s survey of 924 firms for the fourth quarter of last year.
10 Semiconductor Stocks To Watch Amid Russia-Ukraine War
10. STMicroelectronics N.V. (NYSE:STM)
Number of Hedge Fund Holders: 15
STMicroelectronics N.V. (NYSE:STM) is a European company that offers several kinds of semiconductor products that cover a host of applications. These applications include automotive, industrial applications, touch screens, and sensors. STMicroelectronics N.V. (NYSE:STM) was one of the highest searched microcontroller manufacturers on the Russian platform efind.ru, with the platform revealing that nearly 30% of all searchers were for the company in the fourth quarter of 2018.
During its fourth fiscal quarter, STMicroelectronics N.V. (NYSE:STM) earned $3.5 billion in revenue and $0.82 in GAAP EPS, beating analyst estimates for both. Credit Suisse raised the company’s price target to EUR65 from EUR60 in February 2022. 15 of the 924 hedge funds provided by Insider Monkey in the fourth quarter of last year owned the company’s shares.
STMicroelectronics N.V. (NYSE:STM)’s largest investor is Jim Simons’ Renaissance Technologies which owns 1.5 million shares worth $75 million.
Saturna Capital mentioned STMicroelectronics N.V. (NYSE:STM) in its third quarter 2021 investor letter. Here is what the fund said:
“STMicroelectronics has a goal of becoming carbonneutral by 2027, and in 2020 reported that their greenhouse gas emissions were down 19% over the previous year. In 2020, STMicroelectronics was the only semiconductor company with targets approved by the Science Based Targets Initiative for limiting warming to 1.5 degrees Celsius, and their 2027 net-zero goal is recognized as one of the most ambitious in the industry. As greenwashing presents a growing concern within the ESG community, and as more and more funds engage in re-branding exercises that have little to do with pursuing sustainable investment practices among others, our definition of sustainability includes financial sustainability, most often demonstrated by intelligent capital allocation leading to solid cash flows that can sustain a business without resorting to excessive leverage.”
STMicroelectronics N.V. (NYSE:STM) is part of our list of the chip stocks to watch out for in the wake of the Ukraine war, alongside Intel Corporation (NASDAQ:INTC), NVIDIA Corporation (NASDAQ:NVDA) and the Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
9. United Microelectronics Corporation (NYSE:UMC)
Number of Hedge Fund Holders: 15
United Microelectronics Corporation (NYSE:UMC) is one of the world’s largest contract chip manufacturers. The company is Taiwan’s second largest chipmaking company, and it is known for its focus on mature manufacturing technologies that have a wide variety of applications and use cases.
As its fiscal Q4 came to an end in December 2021, United Microelectronics Corporation (NYSE:UMC) had brought in $2.14 billion in revenue and $0.24 in GAAP EPS, beating Wall Street analyst estimates for both. 15 of the 924 hedge funds analyzed by Insider Monkey in the fourth quarter of last year had owned a stake in the chipmaker. United Microelectronics Corporation (NYSE:UMC)’s price target was raised to NT$70 from NT$65 by Citi in July 2021.
United Microelectronics Corporation (NYSE:UMC)’s largest shareholder is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns 6.3 million shares worth $74 million.
8. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 46
NXP Semiconductors N.V. (NASDAQ:NXPI) is a European semiconductor company that offers a wide variety of products. These products are used in automotive, WiFi and Bluetooth devices, sensors, and other products that require an application processor to function.
NXP Semiconductors N.V. (NASDAQ:NXPI) raked in $3 billion in revenue and $2.24 in GAAP EPS during its fourth fiscal quarter, for a strong set of results that saw it beat analyst estimates on both counts. The company’s price target was raised to $275 from $265 by Cowen in February 2022, as the research firm cited recent performance as evidence of the chip company being able to surpass its self set growth goals. Insider Monkey’s survey covering 924 hedge funds in Q4 2021 revealed that 46 had owned the company’s shares.
NXP Semiconductors N.V. (NASDAQ:NXPI)’s largest investor is Ken Fisher’s Fisher Asset Management who owns 897,844 shares worth $204 million.
ClearBridge Investments mentioned NXP Semiconductors N.V. (NASDAQ:NXPI) in its Q3 2021 investor letter outlining that:
“Over the last year, we have sought to improve the up capture of the portfolio by expanding exposure to the select bucket of companies growing revenues and earnings at meaningfully above-average rates and targeting large total addressable markets. Newer names in the select bucket like NXP Semiconductors have been strong contributors to relative performance over this period. We believe that owning a broader group of IT and Internet companies with different drivers to the businesses helps manage some of the risk in this relatively more expensive subsector.”
7. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 57
Texas Instruments Incorporated (NASDAQ:TXN) is one of the oldest semiconductor firms in the world after being formed in the United States in 1930. The company offers several kinds of chip products, which are crucial for the functioning of both the computing and telecommunications industries. Its products, such as analog controllers enable power management in gadgets and other systems, while those such as digital signal processors are used for converting signals in several equipment types.
Texas Instruments Incorporated (NASDAQ:TXN) raked in $4.8 billion in revenue and $2.27 in GAAP EPS during its fourth fiscal quarter, beating analyst estimates on both counts. The company’s share price rating was set to Market Perform by Raymond James in February this year, with the firm citing worries for delayed capital expenditure. The company also provides direct support for Russian-speaking engineers from its European offices.
Texas Instruments Incorporated (NASDAQ:TXN)’s largest investor is Jean-Marie Eveillard’s First Eagle Investment Management which owns 3.3 million shares worth $625 million. Insider Monkey’s Q4 2021 survey of 924 hedge funds revealed that 57 had owned the company’s shares.
In its 3Q 2021 investor letter, Distillate Capital mentioned the company and stated that:
“The largest exited positions were Oracle, which outperformed significantly, and Texas Instruments and Honeywell, which were roughly flat versus the market in the quarter but were edged out for inclusion by other stocks that became even more attractively valued.”
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 70
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the three companies in the world that have the license to design and sell chips based on the x86 microarchitecture. This microarchitecture is the most common in the world and is used by the bulk of the global computing industry. The company has grown in popularity of late as it has managed to snatch market share from its larger rival, Intel Corporation (NASDAQ:INTC).
As its fourth quarter came to an end, Advanced Micro Devices, Inc. (NASDAQ:AMD) managed to earn $4.83 billion in revenue and $0.92 in non-GAAP EPS, beating analyst estimates on both counts. The chip designer’s price target was upgraded to $150 by the firm Bernstein after ten years in February 2022, with Bernstein lamenting that it had missed out on Advanced Micro Devices, Inc. (NASDAQ:AMD) ‘s meteoric share price growth. 70 out of the 924 hedge funds polled by Insider Monkey in the fourth quarter of last year had owned a stake in the company.
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s largest investor is Ken Fisher’s Fisher Asset Management which owns 19.9 million shares worth $2.8 billion.
Carillon Tower Advisers mentioned Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q4 2021 investor letter and shared that:
“Advanced Micro Devices (AMD) supplies semiconductor chips for central processing units (CPUs) and graphic processing units (GPUs). The firm has been gaining share against its primary competitor in the datacenter server CPU space, as this rival has been unable to match the design and manufacturing capabilities of AMD and its partners. Investors are also looking forward to the closing of the previously announced merger with a semiconductor manufacturer that is another one of the portfolio’s holdings. The merger will increase AMD’s capabilities in the Field Programmable Gate Array (FPGA) chip space, and the combined company should possess the potential to win additional market share in the datacenter chip market.”
Alongside NVIDIA Corporation (NASDAQ:NVDA), Intel Corporation (NASDAQ:INTC) and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Advanced Micro Devices, Inc. (NASDAQ:AMD) is another chip stock to be on the lookout for.
Click to continue reading and see 5 Semiconductor Stock to Watch Amid Russia-Ukraine War.
Suggested articles:
- 10 Best Climate Change Stocks to Buy Now
- 10 Best NFT Stocks to Buy Now
- 10 Best Growth Stocks To Buy Now
Disclosure: None. 10 Semiconductor Stock to Watch Amid Russia-Ukraine War is originally published on Insider Monkey.
