BofA Securities Very Bullish on Semiconductors: 5 Top Pick Stocks to Buy for 2021

Analog Devices

This stock could very well continue to benefit from the increase in information technology and 5G spending. Analog Devices Inc. (NASDAQ: ADI) is a leader in the design, manufacture and marketing of analog, mixed-signal and digital signal-processing integrated circuits for use in industrial, automotive, consumer and communication markets worldwide.

The company offers signal-processing products that convert, condition and process real-world phenomena, such as temperature, pressure, sound, light, speed and motion, into electrical signals.

Analog Devices has among the best end-market exposure, with high communications and aerospace/defense market exposure, in addition to offering investors a powerful 5G content growth story. Plus, acquisitions over the past few years like Linear Technology and Hittite Microwave should provide revenue and additional cost synergies that are still coming.

Analog Devices stock investors receive a 1.75% dividend. BofA Securities raised its price target to $178 from $160. The consensus price target is $159.21, and shares closed Wednesday at $158.48.


The company reported solid earnings earlier this month and is also the newest member of the US 1 list. Broadcom Inc. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.

Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems and displays.

The company posted a modest earnings beat and raise as expected, as supply remains tight but the backlog is now at a record $14 billion, which is higher than in the first half of the past fiscal year. Demand visibility going out six months of non-cancellable orders shows 50% free cash flow margins. Toss in an 11% dividend boost, which is the highest in the chip arena, and everything seems to be clicking for Broadcom.

With the increase, the dividend now sits at a solid 3.19%. BofA Securities has a $530 price objective, while the consensus target is $467.21. Broadcom stock closed on Wednesday at $451.21.

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