5 Best Semiconductor Stocks to Buy in 2021

1. Micron Technology Inc (NASDAQ: MU)

Number of Hedge Fund Holders:

Topping the list of the best semiconductor stocks to buy in 2021 is Micron. Headquartered in Boise, Idaho, Micron Technology designs, manufactures, and sells memory and storage products globally. Micron has a good track record of posting top-line and bottom-line beat in almost all of its quarterly earnings since May 2017. In January 2021, the company reported its latest quarterly earnings and revenue beat the street estimates by $110 million and EPS beat by $0.09, led by an improving business environment and better-than-expected demand and pricing for both DRAM and NAND. Additionally, commentary at its earnings conference call suggests continued strong demand in all of the end markets in 2021. According to FactSet data, 29 out of the 35 analysts have buy or overweight ratings for Micron.

As of the end of the fourth quarter, 100 hedge funds in Insider Monkey’s database of 887 funds held stakes in MU, compared to 79 funds in the third quarter. Arrowstreet Capital is the company’s most significant stakeholder, with 17.6 million shares worth $1.3 billion. Micron Technology ranks 21st in our list of the 30 Most Popular Stocks Among Hedge Funds: 2020 Q4 Rankings.

In the Q4 2020 Investor Letter, Bonsai Partners highlighted a few stocks and Micron Technology Inc (NASDAQ:MU) is one of them.

Here is what Bonsai Partners said:

“Micron is a manufacturer of memory semiconductor chips. Micron’s stock appreciated 60.1% during the quarter.

Micron’s shares significantly appreciated this quarter for a couple of reasons. First, and most importantly, the DRAM market appears to have begun its cyclical rebound. As a result, we will likely see higher pricing and profitability through at least the calendar year 2021, hopefully meaningfully longer.

Another (and less meaningful) driver wasthat semiconductor stocks have become ‘en vogue’ once again. I may not be old, but I’ve been around the sector long enough to know that when generalists start getting excited about a ‘new paradigm’ around semiconductors, it’s time to be wary.

I wouldn’t call Micron overvalued, but I’d certainly say it’s more fairly priced today compared to when we first purchased it a few months ago.”

You can also take a peek at Top 10 Car Company Stocks to Invest In and Ray Dalio’s Top 10 Stock Picks for 2021.

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