Semiconductors Have Lagged the Market: 4 Stocks to Buy Right Now

The analysts said after reviewing the Texas Instruments earnings:

Texas Instruments reported a solid first quarter 2021 sales of $4.29 billion, beating guidance by $300 million or 9%. Price objective is raised. Likes: Strength in Industrials, internal fab capacity promotes lead time stability, stable prices bodes well for share gains. Risks: Supply shortages unlikely to be resolved anytime soon, flatlining auto growth in the first quarter, inventories hit 4 year lows.

Investors receive a 2.25% dividend. The $200 BofA Securities price target rose to $210, while the consensus target is $199.90. Texas Instruments stock retreated almost 3% on Friday to close at $180.51 a share.

Western Digital

While not a pure-play chip stock, this is a leader in the total addressable hard disk drive (HDD) market. Western Digital Corp. (NASDAQ: WDC) is an industry-leading developer and manufacturer of storage solutions that help to create, manage, experience and preserve digital content. It is a long-time innovator in the storage industry.

The company is responding to changing market needs by providing a full portfolio of compelling, high-quality storage products with effective technology deployment, high efficiency, flexibility and speed. Its products are marketed under the HGST and WD brands to original equipment manufacturers, distributors, resellers, cloud infrastructure providers and consumers.

This is another company that posted stellar results and was sold off. BofA Securities said this last week:

NAND starting to recover can drive significant positive revisions, Hard disk drive and NAND margins grow quarter over quarter the next few quarters. Long-term agreement between Western Digital and cloud companies is a positive for the industry as well as can lead to more disciplined pricing. Reiterate Buy. Price objective is raised on 9x Calendar 2022 EPS of $8.56.

Note that NAND flash memory is a type of non-volatile storage technology that does not require power in order to retain data.

The BofA Securities price target was raised from $67 to $80, which is in line with the $79.98 consensus figure for Western Digital stock. Friday’s closing share price was $70.63.

Again, most on Wall Street feel the supply chain disruptions affecting the industry were the main impetus behind much of the selling. However, most are much more constructive on the group at these lower price levels, especially after posting such stellar earnings reports. For aggressive growth investors, all these top companies are solid ideas now.