Raymond James thinks that a number of semiconductor stocks are good buys because the industry is likely to get better.
In a report published on Wednesday, analyst Srini Pajjuri suggested Nvidia (NVDA), Advanced Micro Devices (AMD), Intel (INTC), Marvell Technologies (MRVL), and Qorvo (QRVO) shares. Strong Buy ratings were assigned to Nvidia (NVDA +2.71%) and AMD, while Outperform ratings were assigned to Intel, Marvell, and Qorvo.
The analyst has a $290 price target for Nvidia, a $100 price target for AMD, and a $30 price target for Intel. His objectives for Marvell and Qorvo are $54 and $120, respectively.
During the last three upturns, the semiconductor industry has outperformed the S&P 500 by 30% to 50% over a one- to two-year period, according to Pajjuri. He said that investors should not be “overly cautious.” In the second half of 2023, “we anticipate upward [earnings] estimate revisions” for chipmakers, which positions their stocks for further rises.
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Nvidia increased 0.5% to $228.04 at midday on Thursday, while AMD slid 1.4% to $77.23 and Intel remained unchanged at $25.34. Marvell’s shares decreased 0.4% to $45.20, while Qorvo’s shares declined 1.1% to $99.38.
According to the expert, Nvidia is the “undisputed leader” in artificial intelligence applications. Given the opportunity in machine-learning software, he believes the stock’s valuation is appropriate. Moreover, Pajjuri is optimistic about AMD as a result of the rising demand for AI chips.
The analyst says that Intel’s future business expectations have been lowered enough for the stock to start going up in anticipation of a rise in profit margins.
The analyst comes to the conclusion that Qorvo should do well as 5G technology spreads to cheaper devices and the Chinese market recovers when the country’s economy reopens.