4 Chip Stocks That More Than Doubled in 2021
Zacks Investment Research | Dec 28, 2021 03:27AM ET
The chip industry has been under the spotlight throughout 2021 due to huge gains despite the pandemic-led uncertainties. ProShares Ultra Semiconductors ETF and Direxion Daily Semiconductor Bull have returned more than 100% year to date. ProShares Ultra Semiconductors and Direxion Daily Semiconductor Bull gained 117.1% and 134.7%, respectively, outperforming the SPDR S&P 500 ETF's rally of 27.6%. The monthly data on global semiconductor sales from Semiconductor Industry Association for October 2021 testifies the above-mentioned fact. The sales figure was $48.8 billion, up 24% on a year-over-year basis.
The coronavirus-induced solid trend for remote-working and learning has been continuously aiding chip companies on the heels of the rising demand for desktops, notebooks and enterprise laptops. The rising demand for chips required in data centers due to the work-from-home trend-led growing adoption of cloud services has been another major tailwind. More precisely, the growing use of server solid state drives in data centers, which has been driving growth in the NAND market, has been benefiting semiconductor stocks hugely. The accelerating deployment of 5G along with the increasing uptake of 5G smartphones has also been contributing well to semiconductor sales. The growing proliferation of advanced technologies, including AI, ML, AR/VR, IoT, quantum computing and blockchain, is continuously bolstering the semiconductor demand worldwide. The rapid adoption of autonomous vehicles, advanced driver-assisted systems, gaming, wearables, drones and VR/AR devices is further fueling growth in the semiconductor industry.
Strong rebound in the automotive end-market has been another major positive.
We believe that the above-mentioned growth factors are likely to persist in 2022. The rising uncertainties associated with the outbreak of the Omicron variant worldwide are expected to drive the ongoing momentum in remote working. This, in turn, is likely to boost prospects in the semiconductor industry in the upcoming year. Per the World Semiconductor Trade Statistics data , annual semiconductor sales for 2022 are projected at US$ 601 billion, reflecting growth of 8.8%.
Given the upbeat scenario, here we have picked four chip stocks that investors can focus on as the stocks boast strong fundamentals and have more than doubled in 2021.
h3 Year-to-Date Price Performance/h3
Get The News You Want
ON Semiconductor's AMBA shares have gained 128.1% year to date. The company is benefiting from the growing demand for its AI vision silicon products. Improving automotive and security camera businesses along with its transition to a video-artificial intelligence platform remain major positives. Additionally, the growing momentum across its high-performance video processing system-on-a-chip (SoC) is contributing well. This Zacks Rank #3 (Hold) company develops video compression and image processing semiconductors that enable high-definition or HD video capture, share and display. The solid momentum across its CV flow SoCs in professional IP cameras across all geographies is likely to continue driving its top-line growth in the near term. The Zacks Consensus Estimate for Ambarella’s fiscal 2023 earnings has been revised 2.2% upward to $1.84 per share over the past 60 days.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.