6 Sizzling Semiconductor Stocks to Buy After Massive Sell-Off


Broadcom Inc. (NASDAQ: AVGO) has reported solid earnings and is also a member of the US 1 list. It 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 continues to fire on all cylinders, and the analysts noted this when the company posted results:

Modest beat/raise, we reiterate Buy and raise our price target on a top pick in computing/wireless RF. We like the 90% booked with a $16-17 billion backlog providing solid visibility; Apple content gains; best free cash (50% mgn) & dividend yield.

With the increase, the dividend yield now is a solid 3.42%. BofA Securities has a huge $550 price objective. The posted consensus price target is lower at $467.21. Broadcom stock closed trading on Tuesday at $443.60, after just over a 5% pop for the day.

Marvell Technology Group Ltd. (NASDAQ: MRVL) is one of the favored mid-cap picks at BofA Securities. It is a fabless supplier of mixed-signal and analog semiconductor products to a number of storage, computing and communication applications, including hard disk drives, personal computers, servers, Ethernet switches, printers and connectivity markets.

The analysts have become increasingly positive, noting this when the company reported earnings:

We tweak up our estimates modestly and retain Buy on: 1) unique positioning in markets that could rebound fastest in the second half and 2022 – namely enterprise and global 5G infrastructure deployments; 2) multiple product cycles across cloud, 5G, autos (collectively 25% of sales) and design IP across processors, storage and compute; and 3) ability to monetize Arm server IP, and drive potential synergies from announced Inphi acquisition.

Shareholders receive a 0.55% dividend. The $58 BofA Securities price target is much higher than the consensus target of $23.83. The stock closed at $43.86 a share on Tuesday, which was up over 9% for the day.

These six top companies are market leaders with shares that backed up nicely during the recent technology and semiconductor sell-offs. With a slew of catalysts on the horizon, some very positive tailwinds for demand and a push by the Biden administration to bring chip production back to the United States, these stocks all make sense for aggressive growth investors looking to add positions in the semiconductor space. Given the big moves Tuesday, investors may want to be patient and scale in some capital now and see how things play out near term.

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