The Semiconductors Are Going To Be Hot In 2022
The Semiconductor sector (NASDAQ:SOXX) is heating up and in such a way that we have begun to feel like a broken record when we say it. The upgrades, to be blunt, just keep rolling in and promise to keep driving the entire semiconductor complex higher.
Not only is there a high demand for existing chip technology, but for chip-making technology and advances in both. In our view, not only are the chipmakers positioned to benefit from sales, but from the added benefit of advancing their technologies. As we’ve said before, why waste time making the chips of yesterday when they can focus on the chips of tomorrow?
Analysts Pile Love Onto Applied Materials
Applied Materials (NASDAQ:AMAT) has been riding a wave of not only increasingly bullish sentiment, but new analysts as well. If it’s good for an analyst to turn bullish it’s even better for new analysts to bring new followings to the market.
The reason is that there is a high expectation for foundry and logic-related spending and Applied Materials is at the forefront of the industry. The latest shout-out comes from Berenberg Bank, which doesn’t have a rating on the stock, but did set the new high price target of $205, which compares to the consensus of $167.
The consensus assumes 6.5% of upside for the stock and is up 88% in the last year, 11% in the last 90 days, and almost 3% in the last 30 days.
Data Center Growth Drives Advanced Micro Devices Higher
Advanced Micro Devices (NASDAQ:AMD) has received four positive analysts commentaries since the start of the year due to its exposure to data centers, manufacturing, and display technology.
The four include three price target increases and a single upgrade from Sector Weight to Overweight which brings the consensus rating to a Weak Buy and the price target to just over $140. The $140 price target implies about 4% of upside for the stock and is itself on the rise. The consensus target is up 60% in the last year and 2.5% in the last 30 days and we see it trending higher well into 2022.
Aaron Rakers of Wells Fargo sees AMD growing revenue at a 15% CAGR over the next few years and for the company’s margins to expand as well. The recent addition of Xilinx (NASDAQ:XLNX) to the fold will not only boost the top line, but presents ample opportunities for cost synergies and other benefits of scale. Keybanc says data center spending will be “robust” this year.
The Analysts Are Less Bullish On Intel
The analysts are less bullish on Intel (NASDAQ:INTC), but still bullish nonetheless, despite lingering legacy issues and plans to bring the company into the new age of chipmaking. The latest nod comes from Citigroup which maintained its Hold rating but upped the price target to $58.
This compares favorably with the Marketbeat.com consensus of $56.80 which assumes about 3.25% of upside for the stock, but falls far short of the high target. The high target, set by Credit Suisse in early January 2022, is $80 and implies close to 45% of upside in this market.
