For immediate release
Chicago, IL – July 29, 2022 – Today’s Zacks Investment Ideas feature highlights advanced micro devices from AMD, Nvidia NVDA, and Texas Instruments TXN.
3 Chip stores in double digits in July
From freezers to computers, semiconductors keep the devices we rely on every day running smoothly and efficiently.
In other words, they are absolutely essential.
Since the start of the year, semiconductor stocks have fallen. We illustrate the stock performance of three semiconductor stocks – Advanced Micro Devices, Nvidia and Texas Instruments.
Shares of all three companies hit double-digit percentages in July, signaling that the bulls have finally launched their counterattack. Favorable semiconductor legislation (CHIPS Act) has recently boosted the industry.
As semiconductor stocks return to their former glory, let’s take a look at the three companies’ growth prospects and their recent quarterly performance.
Advanced Micro Devices’ product portfolio is extensive and includes microprocessors, graphics processors, motherboard chipsets and, of course, personal computers. The company is currently ranked Zacks Rank #3 (Hold) with an overall VGM score of B.
AMD has stellar growth projections, further bolstered by its style score of an A for growth – something any investor can achieve.
For the current fiscal year (FY22), the Zacks Consensus EPS estimate sits at $4.35, reflecting a strong double-digit 55% year-over-year profit increase.
The growth doesn’t stop there – in FY23, earnings are expected to grow another 12%, reflecting EPS of $4.84.
AMD’s top-line is also in incredible shape; the FY22 Zacks Consensus sales estimate puts the company at $26.3 billion in revenue, enough for an impressive 60% year-over-year revenue expansion.
Additionally, AMD’s revenue is expected to grow an additional 13% in FY23, reflecting annual sales of $29.6 billion.
The company has repeatedly exceeded estimates, stringing together eight straight beats up and down.
Nvidia, another titan in the field of chips, is considered the inventor of the revolutionary and very successful GPU (Graphic Processing Unit). The company is ranked Zacks Rank #4 (Sell) with an overall VGM score of C.
Nvidia has projected rock-solid growth, as evidenced by its style score of a B for growth. For the company’s current fiscal year (FY23), earnings are expected to climb double digits by 21%.
Additionally, Nvidia’s net income is expected to grow another 12% in FY24.
Revenue growth is also remarkable – annual sales are expected to climb to $33.7 billion in FY23, reflecting a solid 25% year-over-year increase. Additionally, the FY24 annual revenue projection of $37.8 billion is an additional 12% increase from FY23.
Beatings up and down are the name of the game for the chip giant, stringing together a more than impressive streak of 13 straight beats in revenue and EPS.
Texas Instruments is an original equipment manufacturer of analog, mixed-signal, and digital signal processing (DSP) integrated circuits. TXN currently carries a Zacks Rank #3 (Hold) with an overall VGM score of an A.
For the company’s current fiscal year (FY22), Zacks’ consensus EPS estimate sits at $8.86, which is enough for a solid 7.3% increase in year-over-year earnings. the other.
However, TXN’s net income is expected to decline a modest 3% in FY23. The company has a growth style score of A.
High-level projections paint the same picture; annual revenue is expected to increase by 9.4% in FY22, but decrease by 3.8% in FY23.
Additionally, TXN has had a blistering earnings streak, beating Zacks’ consensus EPS estimate for 16 consecutive quarters – undoubtedly impressive. Quarterly sales figures were also stellar; the company has posted nine best results in its last ten quarterly reports.
Semiconductor stocks have been stellar investments over the past five years.
Year to date, it has undoubtedly been a brutal time for many semiconductor stocks. However, buyers have intensified significantly over the past month, pushing stocks higher.
As the market regains its footing amid a somewhat brighter economic outlook, chip stocks look set to explode.
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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.
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