Semiconductor Stocks Could Rally Huge in 2023: 7 'Strong Buy' Favorites With Big Dividends

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Between March of 2018 and December of 2021, semiconductor stocks exploded higher and investors thought the gravy train would last forever. During that time, the Philadelphia Semiconductor Index (SOX) rose an astounding 225%. Then came 2022, when the Federal Reserve ended the years-long party by raising interest rates a stunning 450 basis points. That move was a stake to the heart of technology stocks, especially the chip makers.
After the peak, the SOX was almost cut in half, finally bottoming in October of last year. While there has been a solid rally off the lows, there looks to be some big upside left on the table. With supply chains easing, a new focus on production outside of China, and more fabs planned in the United States, it is a good bet that the industry is on its way back.

We screened our 24/7 Wall St. semiconductor research universe looking for top stocks with solid upside potential that not only were rated Buy but also came with dividends. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Analog Devices

Analog Devices Inc. (NASDAQ: ADI) stock could very well continue to benefit from the increase in information technology and 5G spending. The company is a leader in the design, manufacture and marketing of analog, mixed-signal and digital signal processing integrated circuits (ICs) 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 1.71% yield. Truist Financial’s price target on the shares is $215. The consensus target is $194.56, and the stock closed on Thursday at $178.52.


This stock has rallied back nicely, and though it remains most suitable for investors who are more aggressive, Wall Street continues to like the dividend growth. 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, servers and storage, factory automation, power generation and alternative energy systems and displays.
Top analysts and many on Wall Street are quite positive on the company’s massive $10 billion share repurchase authorization through December of 2023, which represents about 4.2% of the company’s market cap.

Shareholders receive a 3.00% dividend. Piper Sandler has a $715 price target, while the consensus target is lower at $655.64. Broadcom stock closed on Thursday at $599.41.


This legacy leader in semiconductors has been hammered, and while some feel it is a value trap, it is hard to count out the company that defined the semiconductor revolution. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide.

The platforms are used in various computing applications, comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.

Intel announced last year that it would invest significantly to build potentially the world’s largest chip-making complex in Ohio, looking to boost capacity as a global shortage of semiconductors affects everything from smartphones to automobiles. Intel says the 1,000-acre “mega-site” northeast of Columbus has room for as many as eight plants, known as “fabs.” The company estimates it would require a $100-billion investment to fully build and equip those plants.

Investors receive a 5.17% dividend. The Needham price target is $32, and Intel has a $27.57 consensus target. Thursday’s closing share price was $27.73.

NXP Semiconductors

NXP Semiconductors N.V. (NASDAQ: NXPI) is still considered a top play for investors looking for a chip stock with Internet of Things and automotive exposure. It became the fourth-largest semiconductor company in the industry after it merged with Freescale in late 2015. It is also important to note that the combined company is the number one supplier in auto semiconductors with a 14% share, as well as the number one supplier in global microcontrollers and a dominant supplier in mobile payments.
NXP continues getting its chips into high-growth areas such as contactless mobile payments, the Internet of Things, mobile phone charging, increased cellular data consumption and even LED lighting. With shares trading at a solid discount to peers, some Wall Street analysts are very positive on the faster earnings growth potential relative to its competition.
Many on Wall Street believe NXP has revenue drivers that are not broad-based and macro-driven, but rather company-specific product cycles developed by an engaged management team, as well as margin expansion drivers that are undervalued by investors. With improving trends in various end markets, it is a top stock to own now.

NXP Semiconductors stock comes with a 2.16% dividend. The $235 Needham price target is a Wall Street high. The consensus target is $195.35, and shares closed at $189.85 on Thursday.


This stock has rallied off its lows but still offers a tempting entry point. Qualcomm Inc. (NASDAQ: QCOM) engages in the development and commercialization of foundational technologies for the wireless industry worldwide.

The Qualcomm CDMA Technologies segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, application processing, multimedia and global positioning system products.

The Qualcomm Technology Licensing segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, WCDMA, LTE and OFDMA-based 5G standards and their derivatives.

The Qualcomm Strategic Initiatives segment invests in early-stage companies in various industries (including 5G, artificial intelligence, automotive, consumer, enterprise, cloud and Internet of Things) and investment for supporting the design and introduction of new products and services for voice and data communications, new industries and applications. It also provides development and other services and related products to U.S. government agencies and their contractors.

The dividend yield here is 2.27%. Qualcomm stock has a $165 price target at Credit Suisse. That compares with the $153.58 consensus target and Thursday’s close at $130.53 a share.

Texas Instruments

This old-school semiconductor company offers solid value at current levels and is a great pick for more conservative investors looking for a technology idea. Texas Instruments Inc. (NASDAQ: TXN) is a broad-based supplier of semiconductor components, ranging from digital signal processors to high-performance analog components, to digital light-processing technology and calculators.
Some 65% of the company’s sales are exposed to the well-diversified, business-to-business industrial, automotive, communications infrastructure and enterprise markets. While business from those sectors, especially automotive, could suffer in the near term, the analyst feels the solid dividend should support the shares. The company is also a big Apple supplier, so the long-term outlook for this venerable leader makes it a safer bet for investors with less risk tolerance.

The company is also a big Apple supplier, so the long-term outlook for this venerable leader makes it a safer bet for investors with less risk tolerance.

Investors receive a 2.81% dividend. BMO Capital Markets has set its price target at $215, and the consensus target is $183.45. On Thursday, Texas Instruments stock closed at $174.99.

United Microelectronics

BofA Securities initiated coverage of this Taiwanese semiconductor company in January with a Buy rating. United Microelectronics Corp. (NYSE: UMC) operates as a semiconductor wafer foundry in Taiwan, Singapore, China, Hong Kong, Japan, the United States, Europe and elsewhere. The company provides circuit design, mask tooling, wafer fabrication and assembly and testing services. It serves fabless design companies and integrated device manufacturers.

Like many chip companies, United Microelectronics has seen some tough sledding, but many think that the supply chain issues that have dogged the industry for the past year are finally starting to ease. Some on Wall Street feel the stock has the potential that industry powerhouse Taiwan Semiconductor has shown.

Shareholders receive a 6.02% dividend. The BofA Securities target price for United Microelectronics stock is $8.90. The $7.38 consensus target is lower than Thursday’s close at $8.36.

While these companies certainly are established and have excellent product silos, semiconductor stocks are volatile and can be very cyclical. They are only suitable for aggressive growth inventors with a high risk tolerance. With that caveat in place, the chip industry is embedded in virtually every product imaginable, and demand for power, memory, storage and a host of other needs will remain indefinitely.

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