5 Stocks That Should Be On Your Radar Now
Kiana Danial | Jul 02, 2020 12:03AM ET
Xilinx (NASDAQ:XLNX) is the leader in FPGAs by market share. Its chips are critical in the performance of various devices in the communications, data processing, industrial, consumer, and automotive markets. This semiconductor stock designs and sells chips, but it outsources manufacturing to third-party chip foundries such as TSMC.
Bulls Say...
FPGAs have taken and are poised to continue to take market share away from ASICs, and also that as FPGAs could provide Xilinx with future nontraditional growth opportunities.
Bears Say...
Intel (NASDAQ:INTC) acquired rival Altera, giving the latter access substantial resources, which could allow Altera to close the performance gap with Xilinx in the future.
Although FPGAs are expected to grow at a faster pace Xilinx's revenue growth has been lumpy.
The next semiconductor 5G company is Qualcomm (NASDAQ:QCOM). Qualcomm develops and licenses wireless technology and also designs chips for smartphones. It has ridden the smartphone boom since the early 2000s, focusing on the tech behind the first 3G and then 4G mobile networks.
Bulls Say...
Qualcomm’s portfolio includes chips enabling 5G communication in everything from the internet to devices like industrial equipment, smartphones, and cars to modems and other equipment that make up the 5G network itself. The stock has a ton of cash on its balance sheet to drive further hardware innovation, and it has consistently paid a dividend for nearly two decades.
Bears Say...
Its chip business faces a host of challenges, from share loss at Samsung (KS:005930) and Apple (NASDAQ:AAPL). Qualcomm's licensing business faces regulatory scrutiny in the U.S., Taiwan, and, South Korea. The company needs to diversify beyond smartphones, which may be challenging as a host of competitors are attempting a similar strategy.
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NVIDIA's (NASDAQ:NVDA) graphics processing units (GPU) are best known for high-end video games, but they’ve found uses in many other applications, 5G included.
5G networks promise not only faster download speeds but also the ability to handle higher traffic and intelligently route network signals where they’re needed most.
Bulls Say...
NVIDIA's graphic chips can be used for artificial intelligence and deep learning which can potentially give them a massive growth opportunity. The company has a first-mover advantage in the autonomous driving market.
Bears Say...
NVIDIA's automotive endeavors face plenty of competition. A majority of sales come from the maturing PC industry via PC gaming.
Much smaller than the other ones, Skyworks Solutions (NASDAQ:SWKS) also deserves to be on the list. This is a key smartphone and consumer electronics supplier, the company has used its connectivity know-how to enter other markets, including smart home devices, connected industrial equipment, and medical devices. It has also developed some of the basic components that power the next-gen 5G network.
Bulls Say...
Though it’s the smallest chipmaker on this list, Skyworks has a healthy balance sheet to promote further growth as the next wave of connectivity services comes online. As more and more devices become connected to the Internet via cellular networks, Skyworks may continue to find new industries that may require additional RF chip content.
Bears Say...
Large customers like Apple and Samsung wield significant pricing power and could exert pricing pressure on vendors like Skyworks over time. Skyworks has significant customer concentration with Apple, and if Apple were to ever switch to another vendor, it would be a damaging blow.
h2 5. Qorvo/h2Qorvo (NASDAQ:QRVO) is a leader in radio frequency chips sold to smartphone makers and infrastructure and defense customers. Much smaller than its peer Skyworks with only 12.6B in market cap. The stock doesn’t pay a dividend and its earning are released around the same time as others in this category.
Bulls Say...
As wireless technologies shift to more advanced 5G networks, smartphones will require greater RF content per device, which should provide a nice runway for further growth at Qorvo.
Bears Say...
The company has significant customer concentration with Apple, and it would be a damaging blow if Apple were ever to switch to another vendor or suffer a severe slowdown in iPhone sales.
h25. Cree/h2
Last but not least is Cree (NASDAQ:CREE), the smallest company based on market cap which is involved in the manufacturing of wide bandgap semiconductor products for power and radio-frequency (RF) applications.
Bulls Say...
Cree is readying up for long-term growth and has a bright future as it is a market leader in Silicon Carbide products. The business has been gaining traction in next-generation technologies like EVs and 5G.
Bears Say...
While Cree has a bold vision, is has weak financials and a steep price.
h3 Microsoft Stock Price - Technical Analysis/h3
Microsoft (NASDAQ:MSFT) price has reached a new all-time high level. However, it may find resistance soon at around $200 or $210. In that case, we could expect a pullback towards key Fibonacci retracement levels of $177, $168, and $161 respectively.
The price remains above the daily Ichimoku cloud. Medium-term profit targets are at $227 and $238 respectively.
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