In this article, we discuss 5 semiconductor stocks for the next 20 years. If you want to read about some more semiconductor stocks for the next 20 years, go directly to “If It Goes Lower, Buy Some More”: 10 Semiconductor Stocks for the Next 20 Years.
5. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 76
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. On July 28, the company posted earnings for the second quarter of 2022, reporting earnings per share of $0.29, missing market estimates by $0.41. The revenue over the period was $15.3 billion, down close to 17% compared to the revenue over the same period last year and missing estimates by $2.6 billion. The firm also lowered full-year revenue guidance to $68 billion against estimates of $74 billion. The company retained adjusted free cash flow guidance for the year.
On August 1, Northland analyst Gus Richard maintained an Outperform rating on Intel Corporation (NASDAQ:INTC) stock with a price target of $55, noting that the manufacturing capability of the firm had strategic value to the US government.
At the end of the first quarter of 2022, 76 hedge funds in the database of Insider Monkey held stakes worth $3.1 billion in Intel Corporation (NASDAQ:INTC), compared to 72 in the previous quarter worth $5.5 billion.
Baron Funds, an asset management firm, mentioned Intel Corporation (NASDAQ:INTC) in its first-quarter 2022 investor letter. Here is what they said:
“Intel Corporation (NASDAQ:INTC) capital spending process is guided by a process they appropriately named “copy exactly.” This means that they attempt to “copy exactly” what they have already built and attempt to improve tried and true processes iteratively.”
4. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 78
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. On July 29, a day after lawmakers agreed to spend hundreds of billions in government spending to boost chip manufacturing in the US, Micron announced that it would be investing heavily in research and development to bring cutting edge chip manufacturing capabilities to the US. The firm said that it would be sharing more details about the plans in the coming weeks. Micron was founded in 1978 and is based in Idaho.
On July 1, Evercore ISI analyst C.J. Muse maintained an Outperform rating on Micron Technology (NASDAQ:MU) stock with a price target of $90, noting that there was excess conservatism in the update outlook on the firm.
At the end of the first quarter of 2022, 78 hedge funds in the database of Insider Monkey held stakes worth $3.4 billion in Micron Technology (NASDAQ:MU), compared to 83 in the preceding quarter worth $5.5 billion.
3. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 81
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. On July 20, carmaker Volkswagen announced that it had signed an agreement with STMicroelectronics to design new chips that will specifically cater to the needs of software-enabled vehicles. The new chips will be manufactured by Taiwan Semiconductor Manufacturing Company. The move is part of a broader plan by the carmaker to restructure the supply chain around chip purchasing.
On July 14, Susquehanna analyst Mehdi Hosseini maintained a Neutral rating on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock and lowered the price target to $88 from $90, noting the revenues of the firm in 2022 made 2023 guides challenging.
At the end of the first quarter of 2022, 81 hedge funds in the database of Insider Monkey held stakes worth $10.1 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 72 in the preceding quarter worth $10.9 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of them. Here is what the fund said:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted in the first quarter due to rising geopolitical tensions, macroeconomic uncertainties, and concerns over softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver above its 15% to 20% revenue growth target over the next several years.”
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 83
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. On August 2, the company posted earnings for the second quarter of 2022, reporting earnings per share of $1.05, beating market estimates by $0.01. The revenue over the period was $6.55 billion, up more than 70% compared to the revenue over the same period last year and beating estimates by $20 million. The firm guided full year revenue to more than $100 million above consensus estimates of $26.1 billion.
On July 19, Wells Fargo analyst Aaron Rakers maintained an Overweight rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) stock and lowered the price target to $130 from $140, backing the shares to return to a 25+ forward price to earnings multiple.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD), with 24 million shares worth more than $2.6 billion.
Here is what Carillon Tower Advisers had to say about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth-quarter 2021 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ: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.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 102
NVIDIA Corporation (NASDAQ:NVDA) operates as a visual computing firm. On July 21, reports indicated that electronics giant Samsung, which makes chips for companies like NVIDIA, was planning to spend $200 billion to set up eleven new chipmaking plants in Texas. The investment will create over 10,000 jobs in the state. The report comes just as lawmakers in the US approved a new plan to boost chip manufacturing in the US to compete with Chinese firms in chip exports around the world. NVIDIA Corporation (NASDAQ:NVDA) will potentially overcome supply constraints by this move.
On July 25, Barclays analyst Blayne Curtis maintained an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA) stock and lowered the price target to $200 from $295, noting that it was too early to buy the dip in semi stocks.
At the end of the first quarter of 2022, 102 hedge funds in the database of Insider Monkey held stakes worth $6.3 billion in NVIDIA Corporation (NASDAQ:NVDA), compared to 110 the preceding quarter worth $10.4 billion.
In its Q1 2022 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corporation (NASDAQ:NVDA) is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming- focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44% and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.
We expect future growth to remain robust as NVIDIA Corporation (NASDAQ:NVDA) chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”
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