Hedge Funds Are Piling Into These Semiconductor Stocks

The number of funds from our database long Applied Materials, Inc. (NASDAQ:AMAT) declined by 10 during the fourth quarter to 61 funds at the end of the year, up from 47 funds at the end of 2016. Over the past 12 months, Applied Materials, Inc. (NASDAQ:AMAT)’s stock surged by 43%, amid excellent performance. In its fiscal first quarter (ended January 28), Applied Materials, Inc. (NASDAQ:AMAT) registered EPS of $1.06, which beat the estimates by $0.08. In addition, the company’s revenue went up by 28% on the year to a record of $4.20 billion and topped the consensus estimate by $80 million. Applied Materials, Inc. (NASDAQ:AMAT) also doubled its dividend to $0.20 and increased its stock buyback program by $6 billion in addition to $2.80 billion under a previous authorization.

In QUALCOMM, Inc. (NASDAQ:QCOM) there are 70 investors in our database holding shares as of the end of 2017, up by seven over the year. During the fourth quarter, the number of funds bullish on QUALCOMM, Inc. (NASDAQ:QCOM) jumped by 29, which can be explained by Broadcom Ltd (NASDAQ:AVGO)’s unsolicited bid to acquire it for $103 billion announced in November. Over the next couple of months, Broadcom Ltd (NASDAQ:AVGO) tried to pursue a hostile takeover and even raised the offer, but in the end, the Committee on Foreign Investment in the United States (CFIUS) stepped in and on March 12, President Trump killed the deal on grounds of national security concerns. QUALCOMM, Inc. (NASDAQ:QCOM)’s stock tanked after the takeover was cancelled, which brought the stock closer to its real valuation. QUALCOMM, Inc. (NASDAQ:QCOM) is also currently acquiring NXP Semiconductors NV (NASDAQ:NXPI), as we’ve mentioned earlier and has recently raised its offer to $127.50 per share from $110 per share following pressure from major NXP Semiconductors investors, including Paul Singer’s Elliott Management.

Micron Technology, Inc. (NASDAQ:MU) saw 80 funds long its stock heading into 2018, up by nine over the quarter and by 13 over the year. Since the beginning of the year, Micron Technology, Inc. (NASDAQ:MU)’s stock has advanced by 20% and the company has recently reported its financial results for the fiscal second quarter. Both EPS of $2.82 and revenue of $7.35 billion topped the estimates by $0.08 and $70 million, respectively, with revenue also growing by 58% on the year. Micron Technology, Inc. (NASDAQ:MU) also issued a strong guidance for the fiscal third-quarter with revenue in the range of $7.20 and $7.60 billion and EPS between $2.76 and $2.90. For the current calendar year, Micron Technology, Inc. (NASDAQ:MU) expects DRAM supply growth at 20% and NAND growth at 45% and the company expects to see in-line performance in DRAM space and slightly above the industry average growth in NAND. Following the results, a number of analysts upgraded or raised their price targets on Micron Technology, Inc. (NASDAQ:MU)’s stock, but Citi analysts downgraded the stock to ‘Neutral’ from ‘Buy’ citing concerns regarding the decline in NAND memory prices

Last but not least, Broadcom Ltd (NASDAQ:AVGO) is the second most popular semiconductor stock among the funds in our database and one of the top dividend picks among hedge funds, as there were 83 investors bullish on the company at the end of 2017, up by nine over the quarter and by 10 funds compared to the end of the previous year. Last year, Broadcom Ltd (NASDAQ:AVGO) completed the acquisition of Brocade Communications Systems, which allowed it to expand its presence in the data center products market. Even though Broadcom Ltd (NASDAQ:AVGO)’s acquisition of QUALCOMM, Inc. (NASDAQ:QCOM) failed, Broadcom Ltd (NASDAQ:AVGO) is expected to pursue other acquisitions Marvell Technology Group Ltd. (NASDAQ:MRVL), Xilinx, Inc. (NASDAQ:XLNX), and Analog Devices, Inc. (NASDAQ:ADI) suggested by analysts among potential targets. The company is also moving forward with its redomiciling back to the US from Singapore, with shareholders having recently voted in favor of the move, which is expected to be effective April 4. In addition, earlier this month, Broadcom Ltd (NASDAQ:AVGO) posted better-than-expected results for the last quarter and analysts reinstated coverage on the stock with bullish ratings.

Disclosure: none