Let’s take a look at the five technology stocks that are too cheap to ignore. For more stocks and some key insights about the sector, head on to 10 Technology Stocks To Buy That Are Too Cheap To Ignore.
5. Intel Corporation (NASDAQ:INTC)
Share Price as of October 15, 2022: $25.85
Number of Hedge Fund Holders: 65
Intel Corporation (NASDAQ:INTC) is one of the oldest and largest chipmaking companies in the world. It manufactures a laundry list of different processors that are used by both everyday users and organizations. The company is headquartered in Santa Clara, California, the United States.
Intel Corporation (NASDAQ:INTC) has faced a host of troubles over the years, which intensified its share price drop this year as the company announced significant market share decline. However, despite these struggles, the firm holds a commanding position in its market, with the latest tally highlighting that it had captured 70% of the highly lucrative data center market.
Intel Corporation (NASDAQ:INTC) also has its eyes on the future and is the front runner in acquiring advanced chipmaking machines from the Dutch firm ASML. These machines are necessary for advanced chip manufacturing technologies, and Intel is also slated to benefit from the U.S. government’s multi billion dollar bill to spur local chip manufacturing. By the end of this year’s second quarter, 65 out of the 895 hedge funds polled by Insider Monkey had held the company’s shares.
Out of these, David Blood and Al Gore’s Generation Investment Management is Intel Corporation (NASDAQ:INTC)’s largest investor. It owns 14 million shares that are worth $552 million.
4. Applied Materials, Inc. (NASDAQ:AMAT)
Share Price as of October 15, 2022: $74.50
Number of Hedge Fund Holders: 67
Applied Materials, Inc. (NASDAQ:AMAT) is an American company that provides manufacturing equipment, software, and services to the semiconductor industry. These products allow chipmakers to manufacture the chips and optimize their fabrication plant performance. The company is headquartered in Santa Clara, California.
Applied Materials, Inc. (NASDAQ:AMAT) is a market leader in the highly lucrative semiconductor industry which, when combined with the fact that the firm expects its customers to spend more than $20 billion simply to manage its products places it in a strong position. The company also has a diverse set of technical solutions that are essential for semiconductor industry growth, and these are slated to grow its revenue at a 13% CAGR.
Applied Materials, Inc. (NASDAQ:AMAT) also pays a 26 cent dividend for a 1.38% yield. Insider Monkey’s June quarter of 2022 survey of 895 hedge funds revealed that 67 had bought the company’s shares.
Applied Materials, Inc. (NASDAQ:AMAT)’s largest investor is David Blood and Al Gore’s Generation Investment Management which owns six million shares that are worth $555 million.
3. Micron Technology, Inc. (NASDAQ:MU)
Share Price as of October 15, 2022: $52.40
Number of Hedge Fund Holders: 69
Micron Technology, Inc. (NASDAQ:MU) is one of the oldest chip companies in the world that designs, manufactures, and sells memory and storage products. These include DRAM, NAND, and SSD products. The company is headquartered in Boise, Idaho.
Micron Technology, Inc. (NASDAQ:MU) is a key technology stock not because of its revenue, or because of its key position in an industry with high barriers to entry, but because it is a heavy spender when it comes to capital expenditure. The company’s latest fiscal year saw it spend $12 billion in CapEx, which made up 39% of its revenue, and if we assume that next year the firm will spend between 37% and 40% in CapEx, then its revenue guidance turns out in between $20 billion and $25 billion. The company’s large spending is expected to pay off in the future.
Additionally, and crucially, Micron Technology, Inc. (NASDAQ:MU) is also investing in extreme ultraviolet (EUV) systems to manufacture the 1-gamma node for memory. Loop Capital set a $70 share price target for the company in October 2022, stating that the risk/reward mix is great especially as Micron Technology, Inc. (NASDAQ:MU)’s current share price is an attractive entry point.
Insider Monkey’s Q2 2022 survey of 895 hedge funds saw 69 investors in the company. Micron Technology, Inc. (NASDAQ:MU) also pays an 11 cent dividend for a 0.87% yield.
Micron Technology, Inc. (NASDAQ:MU)’s largest investor is David Goel and Paul Ferri’s Matrix Capital Management which owns four million shares that are worth $221 million.
Claret Asset Management mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“Inflation is still higher than interest rates… not an incentive to save for most people. Either inflation must come down or interest rates have to go up further. Or both. And probably both. Now that they are taking the punch bowl away and the party is over, what happens next? For whatever reason, the stock market seems to always precede the economic reality: Micron reached a high of $98.45 on January 5th, 2022 and is trading at $50.00 today.”
2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Share Price as of October 15, 2022: $63.89
Number of Hedge Fund Holders: 72
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest contract chip manufacturer. The firm offers its services to some of the largest companies in the world, including Apple, Intel, AMD, and Qualcomm. It is headquartered in Hsinchu, Taiwan.
The Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is currently moving forward with mass producing its 3 nanometer chips. These are the most advanced in the world, and TSMC is a market leader in its space, with the bulk of the share and miles ahead of the second largest player, the Korean chaebol Samsung’s chip division Samsung Foundry.
A testament to Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s strength is that the firm reported 36% annual growth in its third fiscal quarter of 2022 at a time when the chip sector is facing a historic downturn. At the same time, a strong U.S. dollar led the firm to post its largest gross margin of 60.4% in its history, since it earns its revenue in dollars and pays out its costs in local currency.
By the end of this year’s June quarter, 72 out of the 895 hedge funds polled by Insider Monkey had invested in the Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s largest investor in our database is Ken Fisher’s Fisher Asset Management which owns 26 million shares that are worth $2 billion.
RiverPark Funds mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“Taiwan Semiconductor detracted from performance despite a business performance that saw revenue accelerate to over +30% growth. The Company is one of the few fabs in the world that is capable of manufacturing leading-edge integrated circuits (IC). The Company’s leading-edge capacity is being absorbed by high-performance computing applications, particularly by Apple, which has become an integrated circuit powerhouse over the past decade.
The Company’s aggressive investment in leading-edge equipment, tight development with fabless IC designers, and embrace of open development libraries should continue to foster a superior competitive position and attractive long-term growth.”
1. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Share Price as of October 15, 2022: $55.70
Number of Hedge Fund Holders: 87
Advanced Micro Devices, Inc. (NASDAQ:AMD) is an American semiconductor designer and seller that sells products for a wide variety of applications. These include personal computing, cloud computing, data centers, and video game consoles. The firm is headquartered in Santa Clara, California.
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s preliminary third quarter results are the talk of down these days, and they are accompanied by bearish sentiment. However, the fact still remains that the third quarter will be the first time in ten quarters that the firm has reported a sequential sales drop – amidst a wider macroeconomic backdrop that saw inflation kill purchasing power. Despite this, the quarter still posted a strong 29% annual growth.
Advanced Micro Devices, Inc. (NASDAQ:AMD) also refreshed its two year old product lineup in September 2022, with new products manufactured with the latest 5 nanometer chipmaking technology. The company’s 7000 series GPUs will also be 5 nanometer, and they come at a time when demand for GPUs remains slow due to high prices. Insider Monkey’s Q2 2022 survey of 895 hedge funds saw 87 as having bought Advanced Micro Devices, Inc. (NASDAQ:AMD)’s shares.
Out of these, Ken Fisher’s Fisher Asset Management is Advanced Micro Devices, Inc. (NASDAQ:AMD)’s largest investor. It owns a $1.9 billion stake that comes courtesy of 25 million shares.
Baron Funds mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
AMD has been gaining meaningful share in personal computing and server end markets over the past several years driven by the performance of its processors and technology and strong execution against its technology roadmap, and we believe share gains will continue over the coming years from a combination of AMD’s continued advancements and Intel’s stumbles in developing its leading-edge technology.
Additionally, the recently closed acquisitions of Xilinx and Pensando enhance AMD’s positioning within the data center, a key growth engine for the semiconductor industry, and Xilinx specifically opens up several new growth opportunities in new end markets like industrial, automotive, and communications. The company also generates significant cash flow, giving it capital allocation optionality for further M&A and returning capital to shareholders.”
Disclosure: None. You can also take a look at 11 Best Cruise Stocks To Buy and 11 Best Cyclical Stocks To Buy.
