Amid the frenetic race in the semiconductor industry, the usually unassailable Nvidia (NVDA) encountered a rare stumble in late June. After experiencing a flurry of activity surrounding a 10-for-1 stock split and subsequent surges to new highs, the stock felt some investor jitters. Today, NVDA took a modest dip after New Street Research reassessed its stance, downgrading the stock to “Neutral” from “Buy” on valuation concerns.
In this whirlwind of events, a cohort of large-cap semiconductor stocks emerged triumphant, outpacing Nvidia’s respectable 12.69% return in the month of June. Let’s delve into the performances of these market giants as we step into the third quarter on the financial stage.
#1. Taiwan Semiconductor
Established in 1987, Taiwan Semiconductor (TSM) holds the esteemed title of the world’s largest dedicated semiconductor foundry. Serving as a critical linchpin in the global chip supply chain, TSM meticulously crafts the chips essential for companies like Nvidia. With a massive market cap of $946.47 billion, TSM ascended by 15% in June, boasting a robust 77% increase on a year-to-date basis. Moreover, investors can relish a dividend yield of 0.88% alongside TSM’s stellar performance.
Market analysts resoundingly favor TSM, with an average “Strong Buy” rating. Among the 10 covering analysts, 8 commend it with a “Strong Buy,” 1 with a “Moderate Buy,” and only 1 with a “Hold” rating. TSM’s stock currently trades above its mean target price of $180.86, with the lofty Street-high target of $218 projecting an 18% upside potential from current levels.
#2. Skyworks Solutions
Headquartered in Irvine, CA, Skyworks Solutions (SWKS) stands as the vanguard in designing and producing innovative analog semiconductors crucial for wireless connectivity. Despite mirroring Taiwan Semiconductor with a 15% surge in June, SWKS observes a 6.2% downturn on a year-to-date basis. The stock, offering a dividend yield of 2.6%, commands a market cap of $16.7 billion.
Analysts maintain a “Hold” stance on Skyworks stock, with a heterogeneous mix of ratings. Among the 25 analysts in coverage, 6 tout a “Strong Buy,” 17 vouch for a “Hold,” 1 leans towards a “Moderate Sell,” and another advocates a “Strong Sell” rating. Trading slightly above the average analyst price target of $102.41, SWKS eyes a 23.1% climb to the Street’s high target price of $130.
#3. Qorvo
Arriving on the scene in 2015 from Greensboro, North Carolina, Qorvo (QRVO) specializes in manufacturing radio frequency (RF) components pivotal for wireless applications across mobile, infrastructure, and other sectors. QRVO’s stock surged by 17% in June, marking a 5.5% uptick on a year-to-date basis.
Most analysts advocate a “Hold” for QRVO stock, trading above its mean price target of $109.90. With room to ascend by 8.2% to reach the Street-high target of $135, QRVO garners mixed ratings. Out of 23 analysts scrutinizing Qorvo, 5 stake a “Strong Buy,” 2 a “Moderate Buy,” 13 opt for a “Hold,” 1 suggests a “Moderate Sell,” and 2 raise a “Strong Sell” flag.
#4. Broadcom
Established in 1991 and based in San Jose, Broadcom (AVGO) reigns as one of the prominent semiconductor heavyweights worldwide. Dabbling in both analog and digital integrated circuits and other products, Broadcom exhibits a staggering market cap of $804.9 billion.
AVGO displayed an impressive performance in June, soaring by 21%. While up by 53.2% on a year-to-date basis, Broadcom offers a modest dividend yield of 1.21%. Analysts resoundingly endorse AVGO with a resolute “Strong Buy” sentiment, projecting an approximate 7% upside from its current levels to the mean target price of $1,828.30. Out of the 31 analysts monitoring the stock, 28 ardently advocate a “Strong Buy,” while the remainder opt for a “Hold.”
#5. Arm Holdings
Our list concludes with the UK-based Arm Holdings (ARM), renowned for designing the architectural framework central to processors in a myriad of electronic devices. While not directly manufacturing chips, ARM licenses its designs to companies for integration into various gadgets. Boasting a market cap of $176.29 billion, ARM experienced a meteoric 35% surge in June, translating to a remarkable 137.8% rise on a year-to-date basis.
Analysts lean towards a “Moderate Buy” for ARM stock, surpassing its average price target of $118.09. On course to align with the Street-high target of $180, ARM stands poised for continued growth, with a blend of 14 “Strong Buy,” 8 “Hold,” and 1 “Strong Sell” ratings from the 23 covering analysts.