Semiconductor Stocks Earn Bullish Reports During Downturn

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With semiconductor stocks in the doldrums, Wall Street analysts are going bargain-hunting.




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Susquehanna Financial Group analyst Christopher Rolland on Monday pounded the table for several semiconductor stocks following the brokerage firm’s annual tech conference last week. In a note to clients, Rolland increased his price targets on two chip stocks and reiterated buy ratings on five others.

Rolland raised his price targets on Marvell Technology (MRVL) and Power Integrations (POWI) to 105 from 100. He also rates both stocks as positive.

On the stock market today, Marvell stock sank 3.5% to close at 61.17. Power Integrations stock fell 1.9% to 84.68.

Growth Opportunities For Semiconductor Stocks

At the Susquehanna conference, Marvell executives pointed to opportunities serving as tailwinds for the company. Those opportunities include growth in chips for hyperscale cloud computing vendors and enterprise customers.

Marvell makes networking and storage system chips used in data centers as well as automotive, communications and other applications.

Power Integrations executives discussed long-term drivers such as gallium nitride, or GaN, semiconductors. The company believes that 20% of its revenue will come from GaN-related products in five to six years.

Power Integrations also sees significant opportunities in automotive and smart motor controllers.

Other semiconductor stocks with positive ratings from Susquehanna include Advanced Micro Devices (AMD), Cirrus Logic (CRUS), Lattice Semiconductor (LSCC), Microchip Technology (MCHP) and Synaptics (SYNA).

Multiple Issues Weigh On Semiconductor Index

Continued supply chain issues, Russia’s invasion of Ukraine and concerns about the chip cycle peaking have weighed on semiconductor stocks recently.

The Philadelphia semiconductor index, known as SOX, is down 21.5% year to date. On Monday, the SOX tumbled 4.9% in a rough day for the market overall. The SOX includes the 30 largest semiconductor companies traded in the U.S.

Elsewhere on Wall Street, Needham analyst Rajvindra Gill on Monday reiterated his buy rating on Silicon Laboratories (SLAB). He also raised his price target to 230 from 210.

On Monday, Silicon Labs stock slid 1.3% to 138.76.

While Silicon Labs is supply constrained, the company is seeing strong demand for its chips for Internet of Things applications, Gill said in a note to clients.

IBD does not recommend buying stocks during market corrections. IBD trading guidelines suggest investors build watchlists of leading stocks showing strength during downturns. That way they’ll be ready to act once the market recovers. Check out IBD’s Big Picture column for the current market direction.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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