The semiconductor industry is rallying. The demand for semiconductors continues to rise, supply cannot keep pace, and there appears to be a potentially lengthy imbalance developing between the two. If the semiconductor shortage continues into 2022, the industry could continue to climb.
However, there is no guarantee that the semiconductor companies will continue to maintain their profit margins amidst ever-changing market dynamics. If you’re looking to invest in chip stocks, make sure to choose the stocks with the best chances of maintaining and capturing additional market share.
AVGO, a San Jose, CA-based semiconductor firm, designs, develops, and brings semiconductor devices to market. The stock is currently trading at $484. AVGO’s 52-week high is $495.14, and its 52-week low is $304.18. AVGO has a beta of 0.93, which means it is less volatile than the market.
The stock has a forward P/E ratio of 17.61, which is fairly low for a semiconductor stock, so AVGO offers value at its current trading price. AVGO is ranked third out of nearly 100 stocks in the B-rated Semiconductor & Wireless Chip industry. You can find other top stocks in this industry by clicking here.
AVGO has an overall grade of A, which translates into a Strong Buy rating in our POWR Ratings system. The company has grades of B in the Quality, Sentiment, Stability, and Growth components. You can find out how AVGO fares in the Momentum and Value components by clicking here.
Analysts have established an average target price of $530.62 for AVGO. If the stock rises to this level, it will have increased by nearly 13%. Twenty- four analysts rate the stock a Strong Buy or Buy.
Renesas Electronics Corporation (RNECF)
RNECF researches, designs, develops, and makes electronic components. The company specializes in semiconductors along with integrated devices. RNECF is currently trading at $10.98. its 52-week high is $13.07, and its 52-week low is $5.14.
RNECF has an overall grade of A and a Strong Buy rating in our POWR Ratings system. The company has grades of B in the Quality, Value, Growth, and Stability components. You can find out the stock’s grades in the Momentum and Sentiment components by clicking here.
RNECF is ranked fourth out of 99 stocks in the Semiconductor & Wireless Chip industry. The stock is up 90% over the past year.
STMicroelectronics N.V. (STM)
STM is one of the world’s top semiconductor businesses. The company designs, develops, makes, and markets all sorts of semiconductor circuits and related devices. Computer systems, automobiles, consumer products, telecom systems, industrial automation systems, control systems, and more use STM’s semiconductors for functionality.
STM has an overall grade of A, translating into a Strong Buy rating in our POWR Ratings system. The company had grades of B in the Quality, Sentiment, Value, and Growth components. Click here to find out how STM fares in the rest of the components, including Momentum and Stability.
Of the 99 publicly traded companies in the Semiconductor & Wireless Chip industry, STM is ranked second. The stock is currently trading about $5 below its 52-week high of $43.02.
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AVGO shares rose $4.00 (+0.83%) in premarket trading Wednesday. Year-to-date, AVGO has gained 13.20%, versus a 17.73% 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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