In this article, we will look at 5 semiconductor stocks to watch as shortage turns to glut. If you want to read our analysis of the semiconductor industry and the major challenges it is facing, you can go to 10 Semiconductor Stocks to Watch as Shortage Turns to Glut.
5. Skyworks Solutions, Inc. (NASDAQ:SWKS)
Number of Hedge Fund Holders: 39
YTD Loss as of July 15: 36.75%
Skyworks Solutions, Inc. (NASDAQ:SWKS) supplies semiconductor components for Radio Frequency and mobile communications systems. According to Counterpoint Research, smartphone demand is expected to contract by 3% year over year globally, making global shipments fall to 1.36 billion units by the end of 2022. With a declining demand in the smartphone market and the semiconductor industry facing the problem of a surplus, Skyworks Solutions, Inc. (NASDAQ:SWKS) runs the risk of losses from an oversupply in the semiconductor industry.
On July 15, Goldman Sachs analyst Toshiya Hari slashed his price target on Skyworks Solutions, Inc. (NASDAQ:SWKS) to $97 from $120 and reiterated a Neutral rating on the shares.
Over the past 3 months, 22 Wall Street analysts have rated and given their price targets on Skyworks Solutions, Inc. (NASDAQ:SWKS). The stock has received 11 Buy ratings, 10 Hold ratings, and 1 Sell rating. The stock has a high price target of $190 and a low price target of $97. The stock’s average price target of $137.60 implies a 36.16% upside from its closing price of $101.06 on July 15.
At the end of Q1 2022, 39 hedge funds were bullish on Skyworks Solutions, Inc. (NASDAQ:SWKS) with stakes worth $780.51 million. This is compared to 41 hedge funds in the previous quarter with stakes worth $842.47 million. The hedge fund sentiment for the stock is negative.
In the second quarter of 2022, ARK Investment Management reduced its position in Skyworks Solutions, Inc. (NASDAQ:SWKS) by 5%. As of June 30, the fund owns roughly 1,300 shares of the company.
4. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 46
YTD Loss: 15.77%
On July 15, Goldman Sachs analyst Toshiya Hari slashed his price target on Texas Instruments Incorporated (NASDAQ:TXN) to $148 from $162 and reiterated a Sell rating on the shares. On July 5, DZ Bank analyst Ingo Wermann downgraded Texas Instruments Incorporated (NASDAQ:TXN) to Hold from Buy and reiterated his $150 price target on the shares. Texas Instruments Incorporated (NASDAQ:TXN) is at risk of tumbling from declining demand in the automotive and personal electronics markets, both of which are its key end markets.
Over the past 3 months, 21 Wall Street analysts have shared their ratings and price targets on Texas Instruments Incorporated (NASDAQ:TXN). The stock has received 8 Buy ratings, 10 Hold ratings, and 3 Sell ratings. The average price target for the stock is roughly $183, which implies a 13.77% upside from its closing price on July 15 which sits at $160.54. The stock has a high price target of $230 and on the low end is expected to reach $148.
In the second quarter of 2022, Heathbridge Capital Management reduced its stakes in Texas Instruments Incorporated by 3%, bringing them to $10.36 million. Heathbridge Capital Management is the most prominent shareholder in the company.
At the end of Q1 2022, 46 hedge funds were long Texas Instruments Incorporated (NASDAQ:TXN) with stakes worth $1.96 billion. This is compared to 53 positions in the previous quarter with stakes worth $2.91 billion. The hedge fund sentiment for the stock is negative.
Here is what Davis Funds, an investment management firm, had to say about Texas Instruments Incorporated (NASDAQ:TXN) in its “Davis Opportunity Fund” fourth-quarter 2021 investor letter:
“Within technology and communication services, we own a number of online businesses and semiconductor related companies, including Alphabet, Amazon, Intel, Applied Materials and Texas Instruments. Within the realm of high technology, we believe that leadership positions reflect enduring and widening competitive advantages over smaller competitors, with few exceptions. This is because online businesses, as well as semiconductor companies, benefit from economies of scale. An online search and advertising engine will, in general, be more profitable per unit of cost as it grows larger in terms of users and advertising dollars. It is a hub-and-spoke model, in other words, where it is generally not necessary to grow expenses at the same rate that revenues grow beyond a certain threshold. Therefore, returns on capital tend to be higher, the larger and more dominant the online search company is.”
3. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 59
YTD Loss as of July 15: 41.12%
Lam Research Corporation (NASDAQ:LRCX) supplies wafer fabrication equipment and services to the semiconductor industry. Amid oversupply fears and uncertainty, Lam Research Corporation (NASDAQ:LRCX) is becoming a relatively risky investment and is closely being watched by analysts and investors alike.
On July 15, Wells Fargo analyst Joe Quatrochi trimmed his price target on Lam Research Corporation (NASDAQ:LRCX) to $460 from $525 and reiterated an Equal Weight rating on the shares.
Over the past 3 months, 19 Wall Street analysts have given their 12-month price targets and ratings for Lam Research Corporation (NASDAQ:LRCX), of which 11 were Buy and 8 were Hold. The stock has a high price target of $837 and a low price target of $448. The stock’s average price target of roughly $592 implies a 38.57% upside from its closing price on July 15 which sits at $427.13.
As of March 31, Fisher Asset Management owns more than 1.9 million shares of Lam Research Corporation (NASDAQ:LRCX) and is the most prominent shareholder in the company with stakes worth $1.02 billion.
At the end of Q1 2022, 59 hedge funds held stakes in Lam Research Corporation (NASDAQ:LRCX) worth $3.48 billion. This is compared to 62 hedge funds in Q4 2021 with stakes worth $5.02 billion. The hedge fund sentiment for the stock is negative.
Here is what Vulcan Value Partners, an investment management firm, had to say about Lam Research Corporation (NASDAQ:LRCX) in its first-quarter 2022 investor letter:
“Lam Research Corp. designs and manufactures equipment used in the fabrication of semiconductors. Recent supply chain issues have negatively impacted the industry and has resulted in chip shortages. The industry is performing well, exceeding our expectations, and Lam Research’s fundamentals remain strong. The long-term secular drivers of demand and growth in the industry continue to be very powerful. Lam Research is experiencing increasing returns on capital, higher margins, and more stable results.”
2. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 76
YTD Loss as of July 15: 27.42%
Intel Corporation’s (NASDAQ:INTC) biggest end-market is personal computers and computing devices, and with demand for these products contracting by more than 13%, it is one of the semiconductor stocks on analysts’ and investors’ radars. On July 15, Goldman Sachs analyst Toshiya Hari cut his price target on Intel Corporation (NASDAQ:INTC) to $30 from $40 and reiterated a Sell rating on the shares.
Based on 12-month price targets from 20 Wall Street analysts over the past 3 months, Intel Corporation (NASDAQ:INTC) has received 5 Buy ratings, 9 Hold ratings, and 6 Sell ratings. The average price target for Intel Corporation (NASDAQ:INTC) sits at roughly $48, with $72 on the upside and $30 on the downside. The average price target implies a 25% upside from the stock’s current price, which closed at $38.62 on July 15.
At the end of Q1 2022, 76 hedge funds held stakes in Intel Corporation (NASDAQ:INTC) worth $3.15 billion. This is compared to 72 positions in the previous quarter with stakes worth $5.50 billion.
As of June 30, Beech Hill Partners is the largest shareholder in Intel Corporation (NASDAQ:INTC) and has stakes worth $2.23 million in the company.
Here is what Baron Funds, an asset management firm, had to say about Intel Corporation (NASDAQ:INTC) in its first-quarter 2022 investor letter:
“Intel’s (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.”
1. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 78
YTD Loss as of July 15: 35.74%
Analysts are bearish on Micron Technology, Inc. (NASDAQ:MU) and are cutting their price targets and also downgrading the stock, citing negative demand trends in its key-end markets for their bearish stance. The company also recently experienced power disruption at its Hiroshima facility on July 8 and reported that it expects production output loss from both productivity and wafer scrap for the two quarters ahead.
On July 1, Baird analyst Tristan Gerra slashed his price target on Micron Technology, Inc. (NASDAQ:MU) to $60 from $90 and reiterated a Neutral rating on the shares, citing muted demand growth for smartphones and demand for PC units to be flat. On July 5, Fox Advisors analyst Steve Fox downgraded Micron Technology, Inc. (NASDAQ:MU) to Equal Weight from Overweight.
Over the past 3 months, 26 Wall Street analysts have offered 12-month price targets for Micron Technology, Inc. (NASDAQ:MU), with the highest being $165 and the lowest being $50. Micron Technology, Inc. (NASDAQ:MU) has an average price target of roughly $81, which implies a 31.50% upside from the stock’s closing price of $61.53 on July 15. The stock has received 20 Buy ratings, 5 Hold ratings, and 1 Sell rating.
At the end of Q1 2022, 78 hedge funds were long Micron Technology, Inc. (NASDAQ:MU) with stakes worth $3.42 billion. This is compared to 83 hedge funds in the previous quarter with stakes of $5.51 billion. The hedge fund sentiment for the stock is negative.
As of March 31, Matrix Capital Management is the largest shareholder in Micron Technology, Inc. (NASDAQ:MU) with stakes worth $311.56 million.
You can also take a look at 10 Best Semiconductor Stocks to Buy for 2022 and 10 Semiconductor Stocks With Growth Potential.
