The semiconductor companies design and manufacture chips used in computers, smartphones, and numerous other products, including household appliances, consumer electronics, and automobiles. The extensive use of computer chips has made semiconductors ubiquitous as it goes into almost every electronic device and equipment, big and small. The semiconductor industry‘s growth focuses on two areas- self-driving cars and the 5G networks on one hand and GPUs or graphic processing units that are in great demand among crypto miners and gamers. Picking the best semiconductor stocks can be tricky because of the high volatility of the tocks accompanied by the ebb and flow pattern. With the Covid19 pandemic accelerating digital activities, semiconductor growth is skyrocketing.
Best semiconductor stocks
The digitization of industrial economies with more emphasis on cloud computing is exponentially pushing up the demand for semiconductors. Semiconductor stocks are poised for a great leap ahead in 2022. Investors looking for fast growth can invest in the semiconductor stocks of the following companies. The stocks of these companies rank among the best ones. Currently, there is a substantial global shortage of semiconductors, and experts foresee an upward trajectory of all types of semiconductor stocks, including cheap semiconductor stocks in the middle and long term. As the supply and demand fundamentals remain strong, some of the top picks are here.
Skyworks Solutions (SWKS)
The company is a leader in connectivity, an emerging sector that helped earn huge profits much higher than the average. The company has adequate funds to continue research for developing a new product, tap into new markets, and enhance revenue. Being a key supplier to Apple, the company made a fortune from the smartphone boom. As the market saturated, the company moved into the new area of Wi-Fi chips, Internet of Things (IoT), and 5G networks. The company puts extra thrust on connected devices ranging from smart household appliances to wearable to vehicles and connected industrial equipment.
The company is also a leader in developing 5G network equipment. The sales from this segment are more than making up for the stagnation in the smartphone segment that helped the company avoid the steep deals decline experienced by other semiconductor companies. The stock traded at $139.90 as of January 21, 2022, and it is a terrific stock (Zacks Rank 3) figuring in the list of top semiconductor stocks.
Broadcom Inc (AVGO)
California-based Broadcom Inc. is engaged in designing and supplying semiconductors and infrastructure software. According to analysts, currently, the company with Zacks Rank 2 can outperform the market in the coming months. In 2020, the company reported a net income of $2.96 billion, had total assets worth $ 75.93 billion, and total equity of $23.87 billion. As per the quarterly report of September 2021, the company reported a revenue increase of 16% year and more than doubling its net income. The company benefits from its entry into the 5G smartphone segment amid a systematic phasing out of 3G and its entry into other business segments that support diversification, a favorable margin profile, and strong cash flows. The company figures prominently in the semiconductor stocks list, likely to shine brighter in 2022.
Qualcomm Inc. (QCOM)
Qualcomm Inc., a California-based company, manufactures telecom equipment and semiconductors and suppliers to Apple. In 2020 the company reported a net income of $5.20 billion and total assets worth $35.59 billion. In the most recent results, Qualcomm exceeded the earnings and revenue estimates and was upbeat about maintaining its strong performance in the last quarter to end the year on a high note. The company has a leading position in the mobile handset market and benefiting immensely from its presence in the build-up of 5G. The ongoing upgrade cycle of 5G will give Qualcomm a shot in the arm. The Qualcomm stocks currently trading at $164.93 have a moderate buy rating from the Wall Street analysts.
Qualcomm stocks are among the best semiconductor stocks have a target price of $198.11 as per 21 Wall Street analysts who foresee a high of %225.00 and a low of $160. The average price shows an increase of 20.12% over the current price.
