The tech-heavy Nasdaq 100 edged higher this week after the Federal Reserve chairman’s hawkish comment to accelerate bond-buying in a bid to curtail sustained and troublesome inflation. Although investors remained wary of growing inflation and the emergence of the omicron coronavirus variant, U.S. stocks rebounded sharply yesterday.
In addition, better-than-expected private payrolls, higher consumer spending, a recent decline in weekly jobless claims, and President Biden’s strategic initiatives to combat the spread of the omicron variant should bode for the stock market. Moreover, according to a Goldman Sachs report, corporate profits should drive the stock market further next year.
Broadcom Inc. (AVGO)
Incorporated in 2008, AVGO is a global technology company that focuses on semiconductor and infrastructure software solutions. The company combines global scale, engineering depth, broad product portfolio diversity, superior execution, and operational focus to deliver category-leading semiconductor and infrastructure software solutions.
Last month, Meta started deploying the Ethernet switch chip of AVGO, the Broadcom StrataXGS Tomahawk 4 switch series, in its data center network fabric. Through this, AVGO has been able to support Meta and its ecosystem partners on the transition to a leading-edge 25.6Tbps networking fabric.
AVGO’s net revenue for the fiscal third quarter ended August 1, 2021, increased 16.4% year-over-year to $6.78 billion. The company’s net income grew 28.3% from the year-ago value to $3.12 billion. Its EPS rose 28.9% from the prior-year quarter to $6.96. Also, the company’s cash flow increased 11.4% from the year-ago value to $3.54 billion.
Analysts expect AVGO’s revenue for the fiscal year 2021 to be $27.41 billion, representing a 14.8% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 26.1% in the current year. Its stock price has increased 15% over the past nine months and 36.8% over the past year.
AVGO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has an A grade for Momentum and a B grade for Quality and Growth. We’ve also graded AVGO for Sentiment, Value, and Stability. Click here to access all of AVGO’s ratings. AVGO is ranked #1 of 100 stocks in the A-rated Semiconductor & Wireless Chip industry.
Intel Corporation (INTC)
INTC is a global manufacturer and designer of technologies for the cloud, smart, and connected devices for retail, industrial, and consumer uses. The company operates through DCG; IOTG; Mobileye; NSG; PSG; CCG; and All Other segments. Accelerators, Connectivity, Memory and Storage, Platform products, and Boards and Systems are some of INTC’s product portfolios.
In October, INTC unveiled the 12th Gen Intel Core processor family by launching six new unlocked desktop processors, including the big game processor, the 12th Gen Intel Core i9-12900K. The company believes that this 12th Gen Intel Core processor should deliver new levels of leadership performance and more incredible performances for generations.
During the third quarter ended September 25, 2021, INTC’s net revenue increased 4.6% year-over-year to $18.1 billion. The company’s gross margin grew 10.3% from the year-ago value to $10.75 billion. Its operating income rose 3.3% from the prior-year quarter to $5.23 billion. Also, the company’s net income increased 55.6% year-over-year to $7 billion.
INTC has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to increase 3.2% per annum in the next five years. Moreover, the stock has gained 1.5% over the past five trading days.
INTC’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has an A grade for Value and Momentum and a B for Quality.
In addition to the POWR Rating grades I’ve just highlighted, one can see INTC’s ratings for Growth, Stability, and Sentiment here. The stock is ranked #9 in the same industry.
Amgen Inc. (AMGN)
AMGN is a biotechnology company that discovers, develops, manufactures, and delivers human therapeutics worldwide. The company primarily operates in inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology, and neuroscience areas. Some of AMGN’s products are Neulasta, Aranesp, EPOGEN, XGEVA, and Prolia.
This month, Amgen announced that the U.S. Food and Drug Administration (FDA) approved the expansion of the KYPROLIS U.S. prescribing information to include its use in combination with DARZALEX FASPRO and dexamethasone for the treatment of adult patients. This KYPROLIS plus dexamethasone should offer increased flexibility and convenience to patients with relapsed or refractory multiple myeloma and significantly reduce the administrative burden.
AMGN’s total revenues increased 4.4% year-over-year to $6.71 billion for the third quarter ended September 30, 2021. The company’s operating income grew 8.5% from the year-ago value to $3.45 billion. Its net income rose 8% from the prior-year quarter to $2.66 billion. Also, the company’s EPS increased 11.5% year-over-year to $4.67.
AMGN’s revenue for the fiscal year 2022 is expected to be $26.02 billion, representing a 2.3% year-over-year growth. The company has surpassed the consensus EPS in three of the trailing four quarters. Its EPS is expected to increase at the rate of 12.7% next quarter.
It’s no surprise that AMGN has an overall A rating, which equates to a Strong Buy in our POWR Rating system. Also, the stock has an A grade for Quality and a B grade for Stability and Value.
NXP Semiconductors N.V. (NXPI)
Incorporated in 2006, NXPI is a global semiconductor company that provides solutions to enable secure connections and infrastructures. The company’s product portfolio includes microcontrollers, analog and interface devices, radio frequency power amplifiers, security controllers, semiconductor-based environmental and inertial sensors. It operates in China, the Netherlands, the United States, Singapore, Germany, Japan, South Korea, Malaysia, and internationally.
Last month, NXPI collaborated with Ford Motor Company to deliver enhanced driver experiences, convenience, and services across its global fleet of vehicles, including the 2021 Ford F-150 pickup, Mustang Mach-E, and Bronco SUVs. Through this collaboration, NXPI would be able to provide customers expanded services, new user experiences, and convenience through its S32G2 and i.MX 8 series processors.
NXPI’s revenue increased 26.2% year-over-year to $2.86 billion for the third quarter ended October 3, 2021. The company’s gross profit grew 45.2% from the year-ago value to $1.58 billion. Its operating income rose 2,121.9% from the prior-year quarter to $711 million. Also, the company’s net income amounted to $526 million, compared to a net loss of $18 million in the third quarter of 2020.
Analysts expect NXPI’s revenue for the fiscal year 2021 to be $11.03 billion, representing a 28% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 73.2% in the current quarter. Its stock price has increased 38.7% over the past year and 40.1% year-to-date.
NXPI’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has an A grade for Growth and Momentum.
In addition to the POWR Rating grades I’ve just highlighted, one can see NXPI’s ratings for Quality, Stability, Sentiment, and Value here. NXPI is ranked #17 in the Semiconductor & Wireless Chip industry.
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AVGO shares were trading at $553.72 per share on Friday afternoon, up $1.27 (+0.23%). Year-to-date, AVGO has gained 29.39%, versus a 21.81% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...
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