Technology

Is It Still Worth Buying Semiconductors Into 2021?

Broadcom

Another semiconductor stock that has seen exponential growth over the past five years is Broadcom Inc. (NASDAQ: AVGO). However, this has slowed a bit due to the pandemic, and the stock is only up about 36% year to date. Broadcom has made a slew of acquisitions in the past few years, building up a diversified portfolio. The firm has a solid partnership with Apple, with this accounting for about 20% of its 2019 revenues. As Apple continues to thrive, Broadcom will have a hand in it too.

Broadcom stock still trades near the recent 52-week high of $437.27, well up from the 52-week low of $155.67. The consensus price target is up at $460.32.

Micron Technology

Shares of Micron Technology Inc. (NASDAQ: MU) could be poised to take off in 2021, thanks to increasing demand for memory chips. In its most recent earnings report, the firm lifted its guidance for the fiscal first quarter, citing a couple of catalysts. Namely, the increased usage of cloud services is precipitating an increased demand for data centers. Also, 5G seems to be a rising tide that could lift most semiconductors.

Micron stock recently traded around $71, in a 52-week range of $31.13 to $74.61. Analysts have a consensus price target of $78.06.

Intel

Intel Corp. (NASDAQ: INTC) is worth mentioning here as the black sheep of the group. This is the only semiconductor stock in the S&P 500 that is at a loss this year. Its share price is down over 17% year to date. There has been some buzz about this stock recently, however, as hedge fund Third Point wants to make big changes at Intel. Reportedly, Third Point owns roughly $1 billion in Intel stock. It recently released a letter detailing the changes that it wants to see in Intel. The question remains: is it too late for Intel to catch up to the rest of the industry?

Intel stock has yet to recover fully from the pandemic sell-off last March. Shares are trading closer to the 52-week low of $43.61 than the high of $69.29. The consensus price target is $52.05.

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