The Analysts Keep Driving Chip Stocks Higher If you think the semiconductor trade is starting to get crowded you are probably right. Money is flowing into the semiconductor stocks. The Semiconduc...

By Thomas Hughes

This story originally appeared on MarketBeat

Depositphotos.com contributor/Depositphotos.com via MarketBeat

More Reason Than Ever To Buy Semiconductors

If you think the semiconductor trade is starting to get crowded you are probably right. Money is flowing into the semiconductor stocks. The Semiconductor Index (NYSEARCA: SOXX) is up more than 160% since hitting its March 2020 bottom and looks like it's going to keep rising. If you think the semiconductor market is at a peak we think you're wrong. The latest industry data shows that not only are global semiconductor sales rising at a robust pace but sales are accelerating. Global semiconductor sales were up 26% year-over-year in May which is a 4% increase from the prior month and rolling data show sales at historic highs. based on the systemic shortages reported by most Industries we think sales will continue to be robust for many years into the future.

"Global demand for semiconductors remained high in May, as sales increased both year-to-year and month-to-month across all major regional markets," says John Neuffer, SIA president and CEO. "The industry shipped more units on a three-month moving basis in May than during any previous month in the market's history, indicating semiconductor production has ramped up significantly to address rising demand."

The Street Is Under Estimating Advanced Micro Devices

Goldman Sachs thinks the street is underestimating Advanced Micro Devices (NASDAQ: AMD) near-term and long-term revenue growth potential. The firm maintained a buy rating but raised its price target by $5 to $111 versus the broad consensus of $97 on the belief the company will exceed its consensus estimates for the next three years. Goldman estimates adjusted earnings will top $3.80 in 2022 and $5.40 in 2023 which are 40% and 60% above their respective consensus targets. Bank of America shares that sentiment and called the stock out as an undervalued name and one with catch-up potential. According to them, the company should regain its peak market share in the server industry in addition to other strengths. They see earnings topping $4 in 2022 and this isn't the only company whose estimates are rising.

The Analysts Keep Driving Chip Stocks Higher

NVIDIA Is Surfing A Wave Of Analyst Sentiment

NVIDIA (NASDAQ: NVDA) has received wave after wave of analyst upgrades over the last few weeks and months and it doesn't appear to be stopping. The latest comes from Truist Securities which says its industry checks point to rapid growth in the data center end of the business in the calendar year 2022. The firm maintained its buy rating but raised its price target to $910 from $768 compared to the analyst consensus which is near $715. The broad consensus of $715 implies a double-digit downside for the stock but does not reflect the more recent activity. Over the past month, price target increases suggest the stock should be trading well above $900 and pushing the $1,000 mark. In our view, this market needs to cool off a bit and consolidate but, once that happens, the $1,000 mark should be reached fairly easily.

The Analysts Keep Driving Chip Stocks Higher

Qorvo Is Another Under The Radar Pic

Bank of America also called out Qorvo (NASDAQ: QRVO) as an under-the-radar semiconductor name and one with potential for a catch-up. This company has heavy exposure to the 5G market and should benefit greatly from secular tailwinds related to 5G handset adoption. Bank of America rates the stock a buy with a price target of $170 compared to the consensus target of $200. It's important to note Bank of America's price target was set very early in the year, the most recent trend among the analysts has the stock trading at $220 which is good for at least 15% upside.

The Analysts Keep Driving Chip Stocks Higher

NVIDIA is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

What the FTC's 'Click-to-Cancel' Rule Means for Merchants

Subscriptions are easy to start but often difficult to cancel, leading frustrated consumers to seek chargebacks due to confusing cancellation policies. The FTC's new "click-to-cancel" rule mandates that cancellation must be as straightforward as sign-up, potentially reducing chargebacks and improving customer satisfaction.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Business News

Zillow Predicts These 10 Places Will Have the Hottest Housing Markets in 2025

Zillow predicted that the hottest housing market of 2025 will be Buffalo, New York. Here's why.

Business Solutions

Say Hello to the PDF Multi-Tool You Didn't Know You Needed

Get lifetime access to UPDF for just $47.99—the best price online right now.

Business Culture

It's Time to Rewrite Your Company's Values — Here's How

Most companies' values are forgotten or disconnected from daily operations. By rethinking and co-creating values with your team, you can transform them into actionable tools that align behavior, build trust and drive performance.

Science & Technology

5 AI Books Top Entrepreneurs Are Reading in a Rush for 2025

Entrepreneurs must embrace AI or risk falling behind. Discover 2025's top 5 AI books to gain a competitive edge, featuring insights from "The Wolf is at the Door" and a free AI Success Kit.