Companies that produce semiconductors are at a major turning point and have become increasingly indispensable in today’s technology-dominated world. The chips that power things like smartphones, laptops, and servers continue pushing technology forward and making things possible that we could not have imagined a few decades ago. Investors recognize that these chipmakers will play a vital role in the business world going forward, particularly with companies that are helping to usher in the 5G era.
This week, chipmaker stocks are looking great as tech stocks continue to drive the market higher. While the entire sector has been performing well, 3 companies look particularly intriguing this week. All of these semi stocks have catalysts that could send shares higher in the coming weeks. Keep reading below as we take a look at 3 chipmaker stocks to watch this week.
With Intel, you have a chipmaker that could provide strong value at this time in a sector that has been red-hot this year. It’s a stock that sold off in July after announcing the delay of its new 7-nanometer chip, which means you can pick up shares at a very attractive valuation. The former industry-leader is somewhat of an underdog or laggard in the semiconductor space at this time, but that’s one of the big reasons why it should be on your watch list. With a 2.58% dividend yield, an attractive P/E ratio of 9.42, and year-over-year revenue growth in Q2 of 20%, there’s a lot to like about Intel at this time.
Intel made headlines last week when it announced an accelerated share buyback program that will lead the company to purchase $10 billion worth of its stock. Share buybacks are usually a good sign since it shows that the company believes its stock is undervalued at current market prices. It also means that Intel has a healthy enough balance sheet and enough free cash flows to support the repurchasing. Buybacks are known to boost the share price in the short-term, which is what we have seen thus far with Intel. Watch the stock for a break above $52 per share if you are interested in adding it to your portfolio or trading it.
Advanced Micro Devices (NASDAQ:AMD)
Another strong semiconductor stock that investors should be keeping an eye on this week is Advanced Micro Devices. This chipmaker produces high-tech graphics cards and saw year-over-year revenue growth in Q2 of 26% to $1.93 billion. AMD continues to reach new all-time highs after breaking out from months of consolidation in late July on its strong earnings results and the stock was up as much as 8% during Monday’s trading session.
One reason why AMD is interesting this week has to do with the fact that AMD just launched its AMD Radeon RX 5300 entry-level gaming card, which is priced lower than a competing card from NVIDIA (NASDAQ:NVDA). You also have to be interested in the fact that AMD’s graphics cards will be included in the upcoming next-generation gaming systems from Microsoft and Sony. When you have multiple bullish catalysts occurring for a stock in a strong sector, it pays to take notice. Don’t be surprised to see this stock trading at $100 sooner rather than later.
The last chipmaker stock that investors should be monitoring closely this week is Broadcom. This company offers semiconductors that are used in technology such as smartphones, data centers, networking equipment, and more. It is one of the biggest chip suppliers for Apple (NASDAQ:AAPL), which continues to generate strong revenue for the company. Despite the pandemic, Broadcom was able to generate record quarterly free cash flow in Q2 of roughly $3 billion and the stock pays out a solid dividend yield of 3.73%.
Broadcom is an important semiconductor company that is focused on becoming the leader in infrastructure technology. The company reports its Q3 earnings this week on Thursday, September 3rd after market close. An earnings beat could be the next catalyst to send shares of the chipmaker higher. With most companies avoiding forward guidance entirely, investors should be interested in the fact that Broadcom was confident enough to provide guidance last quarter. There’s a strong chance that Broadcom is benefitting from an uptick in 5G and cloud spending from major companies, which means it could be a smart buy at this time.
Before you consider Intel, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Intel wasn't on the list.
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