Check Out These Top Semiconductor Stocks Right Now
Despite concerns of rising inflation and a possible recession, top semiconductor stocks continue to be a relevant sector of the stock market today. After all, virtually every electronic device requires semiconductors these days. This is true for smartphones, laptops, automobiles, and even household appliances such as your microwave and refrigerator. Besides that, with the ongoing global chip shortage, demand outpaces supply, sending chip prices higher. By extension, this could mean higher margins for these semiconductor companies. As such, investors could be eyeing semiconductor stocks amid this earnings season.
A notable choice would be ASML Holding (NASDAQ: ASML). Although not directly a semiconductor company, it builds machines that are needed by semiconductor companies. EUV lithography machines are crucial to making the semiconductors that power our devices and ASML is the only company that makes them. Just last week, the company reported its quarterly earnings. In brief, the company reported revenues and earnings that were slightly ahead of estimates. Impressively, bookings remain strong at $7.36 billion as customers race to increase capacity amid the chip shortage. And on that note, check out these semiconductor stocks in the stock market today.
Semiconductor Stocks To Watch In May 2022
- NXP Semiconductors NV (NASDAQ: NXPI)
- ON Semiconductor Corporation (NASDAQ: ON)
- Texas Instruments Incorporated (NASDAQ: TXN)
- Qualcomm Inc. (NASDAQ: QCOM)
NXP Semiconductors
Starting us off today is NXP. In detail, it is a Dutch semiconductor company that provides high-performance mixed-signal and standard product solutions. Its product solutions are generally used in a range of end-market applications, including automotive, personal security, mobile communications, multi-market industrials, consumer, and computing. As a matter of fact, the company owns over 9,500 patent families and is the co-inventor of near-field communication (NFC). For a sense of scale, the company hires approximately 31,000 employees in more than 30 countries. Although NXPI stock has been under pressure over the past year, things may be turning around.
Yesterday, NXP announced its financial results for the first quarter of the year. Diving in, NXPI brought in a total revenue of $3.14 billion this quarter, an increase from last year’s $2.57 billion. This slightly beats estimates by $40 million and represents a rise of 22.2% year-over-year. Moving on, its profits see a substantial growth of 86.1% compared to the prior year. Specifically, net income rose from $353 million to $657 million for the quarter. In the next quarter, NXPI expects total revenue to grow by 22% to 30% year-over-year. Gross profit is expected to range from $1.78 billion to $1.92 billion. Given the solid quarter, should you buy NXPI stock?
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ON Semiconductor
ON Semiconductor, also known as Onsemi, is a tech company with over 60 years of experience in the semiconductor industry. As a leading semiconductor manufacturer with over 80,000 different parts and a global supply chain, Onsemi serves tens of thousands of customers across hundreds of markets. This would also include automotive and industrial solutions, along with 5G, cloud, and Internet of Things. In the past year, ON stock has risen over 45%. Before the market opened yesterday, Onsemi reported its quarterly financial results that smashed expectations.
The company brought in a record revenue of $1.95 billion, representing a 31% year-over-year increase and beating analyst estimates of $1.91 billion. The company owes this to the automotive and industrial end-markets, which now make up 65% of its revenue. As for its profits, Onsemi raked in $530.2 million for the quarter, a huge rise from the $89.9 million it brought in during the same period in 2021. Accordingly, earnings per share came in at $1.22 per share, exceeding Wall Street estimates of $1.05 per share. Moving forward, the company is confident in sustaining this momentum thanks to its differentiated portfolio, long-term supply agreements, and exposure to secular megatrends. As such, should you invest in ON stock?
Texas Instruments
Another notable semiconductor name to consider would be Texas Instruments (TXN). In essence, the company designs and manufactures semiconductors and various integrated circuits. Specifically, TXN focuses on developing analog chips and embedded processors, which account for more than 80% of its revenue. It is also one of the biggest semiconductor companies in the world based on sales volume. Besides semiconductors, TXN also produces its digital light processing technology and education technology products such as calculators and microcontrollers.
Last week, the company reported its first-quarter 2022 financials that beat estimates on revenue and earnings. For starters, revenue came in at $4.91 billion, an increase of 14% from the same quarter a year ago. This increase was driven primarily by growth in industrial and automotive. Next to that, TXN brought in a net income of $2.2 billion this quarter, with earnings per share of $2.35. Overall, the company’s income grew by 26%. Besides that, cash flow for the trailing 12 months was $9.06 billion, underscoring the strength of its business model. All things considered, should you watch TXN stock?
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Qualcomm
Last but not least, we have Qualcomm, the world’s leading wireless technology innovator. It is also one of the key players in the development and expansion of 5G connectivity. As a matter of fact, the company owns several patents critical to the 5G and 4G mobile communications standards. In addition to wireless technology, Qualcomm over the years has expanded into selling semiconductor products using a predominantly fabless manufacturing model. The company also develops semiconductor components and software for vehicles, watches, laptops, wi-fi, smartphones, and other devices. Last Wednesday, the company announced its financials for the second quarter of fiscal 2022.
Revenue for the quarter was $11.16 billion, an increase of 41% year-over-year. Along with that, net income came in at a solid $2.93 billion for the quarter, increasing by over 60% compared to a year earlier. As such, earnings per share were $2.57, a 68% increase year-over-year. “We are pleased to announce another quarter of record revenues, reflecting the successful execution of our growth and diversification strategy and strong demand for our wireless and high-performance, low-power processor technologies across multiple industries,” said Cristiano Amon, President, and CEO of Qualcomm. “We are well-positioned to meet our long-term targets and enable the connected intelligent edge.” Given the positive development, does QCOM stock have a spot in your portfolio?
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