Semiconductors certainly receive their fair share of media coverage. Turn on CNBC or any other financial news network, and you are likely to hear all about the top semiconductors. However, the commentary provided on cable channels and radio shows is not always wholly forthright.

If you are uncertain which semiconductor stock is best for your portfolio, you are not alone. Most investors want a piece of the semiconductor pie, yet few strongly feel about specific semiconductor stocks.

Advanced Micro Devices (AMD) and Micron Technology (MU) are two of the industry’s most intriguing players. Let’s analyze these stocks to figure out which belongs in your portfolio.

Advanced Micro Devices (AMD)

AMD has gradually evolved from an enterprise-oriented business to a chipmaker for consumer PCs. Though NVIDIA (NVDA) is undoubtedly the industry’s monolith, AMD is a formidable contender, especially when it comes to cutting-edge graphic processing technology.

AMD is a bit of a POWR Rating disappointment as the stock has an overall grade of C grade. This grade indicates AMD is rated Neutral. AMD has a B Growth Grade, a D Stability Grade, and grades of C in the Quality and Momentum components. You can find out how AMD fares in the rest of the components, including Sentiment and Value, by clicking here. Out of the 99 publicly traded companies in the Semiconductor & Wireless Chip industry, AMD is ranked toward the bottom third, slotting in at 69th overall. You can find top-ranked stocks in this industry by clicking here.

Analysts have high hopes for AMD, setting an average target price of $106.88 for the stock. If AMD hits this price target, it will have popped by more than 17%. AMD has a forward P/E ratio of 44.98. This is a high ratio that should give investors some pause. AMD is also highly volatile as the stock has a beta of 2.01. This means it is twice as volatile as the market. 

Micron Technology (MU)

MU is one of the world’s top semiconductor memory solutions providers. MU’s brands include Ballistix, Crucial, and Micron. The company’s storage and memory technologies are used by consumers and businesses in computer, mobile, and networking products. The bulk of MU’s revenue stems from its DRAM sales.

MU has a low forward P/E ratio of 13.59, which indicates the stock is underpriced at nearly $80 per share. The stock’s 52-week high is $96.96 per share. MU has an overall grade of B POWR Rating and a Buy rating in our POWR Ratings system. The company has a grade of B in the Quality, Sentiment, Value, and Growth components of the POWR Ratings. You can find out how MU fares in the Momentum and Stability components by clicking here.

Out of the 99 publicly traded companies in the Semiconductor and Wireless Chip industry, MU is ranked in the top quarter, slotting in at number 44. 

Which is the Better Buy?

Analysts have set an average target price of $118.63 per share. An increase to this level represents a 57% upward move. Add in the fact that MU has a better overall rating in the POWR Ratings and is ranked higher in the semiconductor industry. It becomes even more apparent that MU is the better of these two semiconductor stocks.

AMD shares were trading at $113.34 per share on Friday morning, up $0.99 (+0.88%). Year-to-date, AMD has gained 23.59%, versus a 19.14% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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