In this piece, we will take a look at the 10 semiconductor stocks to buy today according to billionaire Ken Fisher.
Ken Fisher is one of the most well known figures in the investment world, and he is at the helm of the investment firm Fisher Asset Management. While Mr. Fisher has separated himself from the daily affairs of the firm, after having left his role as Fisher Asset’s chief executive officer in 2016, he is still connected to the firm as its co-chief investment officer and executive chairman.
Fisher Asset Management is one of the biggest hedge funds in the world. According to Insider Monkey’s study of its fourth quarter 2021 portfolio, the firm had a whopping $178 billion in assets under management. Mr. Fisher’s background is quite unique in the investment community, as he also wrote a column for Forbes Magazine for more than 30 years. Alongside this, the executive has also authored several research papers, particularly in the field of behavioral finance, which deals with investor behavior and information signals and their relation to the stock market and share price movement.
His success in the investment world has also made Mr. Fisher a billionaire. According to Forbes Magazine, the investor was worth an eye-popping $5.4 billion as of March 2022.
A brief look at the investment firm’s portfolio reveals that it has holdings in a wide variety of companies. The largest investments are in technology firms, and reflecting the portfolio’s overall value, these are in the billions of dollars.
However, in this piece, we will zero in on Fisher Asset Management’s semiconductor holdings. The semiconductor sector is at the heart of the information technology industry, as the chips are responsible for powering all electronic devices, whether they’re smartphones, laptops, routers, or sensors inside a car.
Analyzing the hedge fund’s portfolio reveals that its top three semiconductor holdings are in ASML Holding N.V. (NASDAQ:ASML), the Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Advanced Micro Devices, Inc. (NASDAQ:AMD). These reflect true insight into the semiconductor space, the details of which we’ll get into once we discuss the companies themselves later on.
Our Methodology
In order to pick out Mr. Fisher’s firm’s top semiconductor stocks, we sifted through its filings with the Securities and Exchange Commission (SEC) for the fourth quarter of last year. After the firms were identified, we then analyzed them through their earnings reports, analyst coverage, investor letters, relevant industry developments, and significant holdings generated via Insider Monkey’s survey of 924 hedge funds for Q4 2021.
10 Semiconductor Stocks To Buy Today According to Billionaire Ken Fisher
10. NXP Semiconductors N.V. (NASDAQ:NXPI)
Fisher Asset Management’s Stake Value: $204.5 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 46
NXP Semiconductors N.V. (NASDAQ:NXPI) is a semiconductor company whose products cover a wide variety of applications. Its product portfolio includes several kinds of application processors, communications processors, microcontrollers, and sensors. These are used in devices such as WiFi and Bluetooth devices, automotive, and communications infrastructure.
Fisher Asset Management held a stake of $204.5 million in NXP Semiconductors N.V. as the fourth quarter of last year came to an end. This was through owning 897,844 shares and represented a mere 0.11% of its portfolio. During the same time period, 46 of the 924 hedge funds polled by Insider Monkey also held stakes in the semiconductor company.
For its fiscal fourth quarter, NXP Semiconductors N.V. reported $3 billion in revenue and $2.24 in GAAP EPS, beating analyst estimates on both counts. Cowen raised its price target to $275 from $265 in February 2022, sharing optimism about the company being able to strongly grow in the future.
NXP Semiconductors N.V.’s largest investor after Fisher Asset Management is Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC. It owns 667,351 shares worth $152 million.
ClearBridge Investments mentioned NXP Semiconductors N.V. in its Q3 2021 investor letter. Here is what the fund said:
“Over the last year, we have sought to improve the up capture of the portfolio by expanding exposure to the select bucket of companies growing revenues and earnings at meaningfully above-average rates and targeting large total addressable markets. Newer names in the select bucket like NXP Semiconductors N.V. have been strong contributors to relative performance over this period. We believe that owning a broader group of IT and Internet companies with different drivers to the businesses helps manage some of the risk in this relatively more expensive subsector.”
NXP Semiconductors N.V. joins Taiwan Semiconductor Manufacturing Company Limited, ASML Holding N.V., and Advanced Micro Devices, Inc. in the list of Fisher Asset Management’s hot semiconductor stock picks.
9. ASE Technology Holding Co., Ltd. (NYSE:ASX)
Fisher Asset Management’s Stake Value: $204.9 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 9
ASE Technology Holding Co., Ltd. (NYSE:ASX) is a relatively little known Taiwanese semiconductor firm. The company operates at the front end of the chip supply chain. Its products and services include testing and packaging the semiconductors once they have been manufactured by the fabrication plants.
ASE Technology Holding Co., Ltd. brought in NT$173 billion in revenue and $0.50 in GAAP EPS for its fiscal fourth quarter, which marked a 16% annual revenue growth. The company announced that it would sell its shares and interests in GAPT Holdings to the Chinese Wise Road Capital in December last year in order to diversify its operational presence in China and generate funds for investment in Taiwan.
Mr. Fisher’s investment fund had a stake of $204.9 million in ASE Technology Holding Co., Ltd. which came through owning 26 million shares. It also represented 0.11% of the firm’s portfolio in Q4 2021. An Insider Monkey survey of 924 hedge funds in the fourth quarter of last year revealed that nine also held a stake in ASE Technology Holding Co., Ltd..
Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is ASE Technology Holding Co., Ltd.’s second largest investor after Fisher Asset Management through a $59.8 million stake that comes via 7.6 million shares.
8. Broadcom Inc. (NASDAQ:AVGO)
Fisher Asset Management’s Stake Value: $500 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.28%
Number of Hedge Fund Holders: 67
Broadcom Inc. (NASDAQ:AVGO) is an American semiconductor firm that focuses primarily on communications devices. The company develops signals processors, several kinds of communications system on chips (SoCs), and controllers alongside other devices.
During its first fiscal quarter, Broadcom Inc. earned $7.7 billion in revenue and $8.39 in non-GAAP EPS, beating analyst estimates for both. In a sizzling note, investment bank JPMorgan raised the company’s price target to $715 from $700 in March 2022, highlighting that its strong earnings reflected a firm grip on the market and strong product cycles.
Fisher Asset Management owned 752,289 Broadcom Inc. shares during the fourth quarter of last year, which were worth $500 million and represented 0.28% of its investment portfolio. 67 of the 924 hedge funds analyzed by Insider Monkey during 4Q 2021 also owned a stake in the firm.
Broadcom Inc.’s largest investor is William Von Mueffling’s Cantillon Capital Management who owns one million shares worth $669 million.
In a third quarter 2021 investor letter, Miller Howard Investments mentioned Broadcom Inc. and stated that:
“Technology remains important in our portfolios, although the sector weights have come down over the past year. We now hold Broadcom (AVGO) of which have strong growth prospects, yet attractive valuations in our view. Unlike many younger tech companies, we believe our holdings should significantly benefit from an upturn in the economy.”
7. Applied Materials, Inc. (NASDAQ:AMAT)
Fisher Asset Management’s Stake Value: $557 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.31%
Number of Hedge Fund Holders: 79
Applied Materials, Inc. (NASDAQ:AMAT) is a backend chip firm that provides machines that are used in the manufacturing of semiconductor devices. These machines aid in several areas of the chip fabrication process such as etching and deposition, alongside inspection.
Mr. Fisher’s Fisher Asset Management held a $557 million stake in Applied Materials, Inc. during Q4 2021. This was through owning 3.5 million shares and it made up 0.31% of its investment portfolio. An Insider Monkey survey of 924 hedge funds during the same time period revealed that 79 owned the company’s shares.
Applied Materials, Inc. earned $6.2 billion in revenue and $1.89 in non-GAAP EPS during its first fiscal quarter, beating analyst estimates for both. Its price target of $150 was raised to $160 by UBS in February 2022, with the firm outlining that not only did the company’s orders grow significantly during the quarter, but it managed to deliver stellar results despite industry constraints.
David Blood and Al Gore’s Generation Investment Management is Applied Materials, Inc.’s largest investor. It owns 4.2 million shares that are worth $672 million.
LRT Capital Management mentioned Applied Materials, Inc. in its third quarter 2021 investor letter. Here is what the fund said:
“Compare Rivian to Applied Materials (AMAT), a semiconductor equipment supply company that specializes in the “frontend” (primarily patterning) of the semiconductor manufacturing process. The company makes products that are critical to making modern computer chips. It has a market cap of approximately $145 billion dollars. It, also, generated $0 from selling EVs over its lifetime. However, Applied Materials generated $21 billion in revenue and $5.1 billion in net income over the past twelve months alone in its semiconductor equipment business. Since a company that sells no EVs is worth $150 billion, then Applied Materials semiconductor business is being valued at a negative $5 billion dollars…”
6. Intel Corporation (NASDAQ:INTC)
Fisher Asset Management’s Stake Value: $775 million
Percentage of Fisher Asset Management’s 13F Portfolio: 0.43%
Number of Hedge Fund Holders: 74
Intel Corporation (NASDAQ:INTC) is the largest and one of the oldest semiconductor firms in the world. It is known for having pioneered the modern day microprocessor, and it is the only chip firm in the world that both designs and manufactures its products through facilities located in the United States and globally.
Fisher Asset Management had a stake of $775 million in Intel Corporation in the fourth quarter last year. This came through owning 15 million shares and it represented 0.43% of the company’s investment portfolio. Intel Corporation is currently implementing an aggressive capital allocation strategy to bring its manufacturing technologies up to speed. It is also diversifying its business to expand production towards making the products of other companies as well.
For its fourth fiscal quarter, Intel Corporation earned $19.5 billion in revenue and $1.09 in non-GAAP EPS, beating analyst estimates for both at a time when it is investing heavily into manufacturing facilities. Investment firm Raymond James upgraded Intel’s share rating to Market Perform, as it stated that despite some pain in the near future, the share price will not significantly underperform. 74 out of the 924 hedge funds part of Insider Monkey’s Q4 2021 survey owned a stake in the company.
Intel Corporation’s largest investor according to Insider Monkey’s research is Seth Klarman’s Baupost Group. It has a stake of $928 million through holding 18 million shares.
Third Point Management mentioned Intel Corporation in its fourth quarter 2021 investor letter and stated that:
“2021 was a highly productive year for Intel‘s new CEO, Pat Gelsinger. Despite the stock’s tepid results, we see a compelling, underappreciated fundamental story. Intel’s “brain drain” – a key part of our thesis when we first sought to help the company confront its long-time underperformance – appears to be reversing. Since joining Intel, Mr. Gelsinger has not only brought back prominent Intel former employees but has also attracted talents from competitors such as Advanced Micro Devices, Inc., Nvidia, Apple, and, most recently, Micron’s stellar Chief Financial Officer, David Zinsner.
We are encouraged by Intel Corporation’s aggressive investment plan, including a recently announced fabrication plant in Ohio and acquisition of Tower Semiconductors. We knew from the start that Intel’s turnaround would be complex and lengthy, and we have been pleased to see Mr. Gelsinger sacrifice near-term earnings for long-term growth.
Finally, after a series of blunders across its PC and Server product lines, Intel is finally receiving good reviews for one of its upcoming processors: Alder Lake. Tom’s Hardware, a preeminent hardware publication, called Alder Lake “a cataclysmic shift in Intel Corporation’s battle against AMD’s potent Ryzen 5000 chips.” While this is just one product across a broad lineup, and given it will take time to achieve leadership across them all, we are encouraged by these tangible signs of progress under Mr. Gelsinger’s leadership. With talent returning, an improving product suite, and a willingness to invest for growth, we believe Intel’s prospects have turned the corner. We expect that the company’s upcoming analyst day will be an ideal time for Mr. Gelsinger to articulate the progress he has made and begin to reset expectations for the company.”
Alongside ASML Holding N.V., the Taiwan Semiconductor Manufacturing Company Limited, and Advanced Micro Devices, Inc., Intel Corporation is one of Fisher Asset Management’s favorite stocks.
5. Lam Research Corporation (NASDAQ:LRCX)
Fisher Asset Management’s Stake Value: $1.29 billion
Percentage of Fisher Asset Management’s 13F Portfolio: 0.72%
Number of Hedge Fund Holders: 63
Lam Research Corporation (NASDAQ:LRCX) is an American company that provides chip manufacturers with equipment to manufacture semiconductors. Its machines are used by all major chipmakers in the world, and they allow them to carry out several phases in the complex chip manufacturing process.
Mr. Fisher’s investment firm had a whopping $1.29 billion stake in Lam Research Corporation during the fourth quarter of last year. This was through owning 1.8 million shares, and yet, it represented a mere 0.72% of the multi-billion dollar investment portfolio. Insider Monkey’s Q4 2021 survey of 924 hedge funds revealed that 63 had also owned the chipmaking equipment provider’s shares.
Lam Research Corporation brought in $4.23 billion in revenue and $8.33 in non-GAAP EPS during its second fiscal quarter, beating analyst estimates for both. In a crucial development, the company announced new equipment in February this year, targeting the Gate All-Around (GAA) transistors, which are believed to be the next step in the semiconductor evolution process.
Lam Research Corporation’s largest investor after Fisher Asset Management is Philippe Laffont’s Coatue Management which owns 860,025 shares worth $618 million, according to Insider Monkey’s research.
In its third quarter 2021 investor letter, ClearBridge Investments mentioned the company and stated that:
“It was a relatively quiet quarter in terms of portfolio changes, although we took advantage of very strong performance to exit semiconductor equipment manufacturer Lam Research. While Lam has extremely valuable technology and an exceptionally robust secular growth story, it is also highly cyclical, and we chose to exit our position after a period of extraordinary performance.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Fisher Asset Management’s Stake Value: $1.5 billion
Percentage of Fisher Asset Management’s 13F Portfolio: 0.84%
Number of Hedge Fund Holders: 111
NVIDIA Corporation (NASDAQ:NVDA) is a graphics processing unit (GPU) designer whose products enable different kinds of calculations alongside a system’s central processing unit (CPU). Originally starting out as a firm providing products to video gamers, NVIDIA Corporation is now diversifying its presence to include corporate customers as well.
NVIDIA Corporation raked in $7.6 billion in revenue and $1.32 in non-GAAP EPS during its fourth fiscal quarter, in a strong set of results that saw it beat analyst estimates for both. Despite the company having to pay a billion dollar termination fee to the British design house Arm Ltd. as part of a failed takeover attempt, Mizuho raised NVIDIA Corporation’s price target to $355 from $345 in February 2022, based on the chip firm’s strong guidance. Out of the 924 hedge funds profiled by Insider Monkey in Q4 2021, 111 had owned a stake in the company.
Mr. Fisher’s investment firm had held a $1.5 billion stake in NVIDIA Corporation during Q4 2021, which translated into 0.84% of its investment portfolio and came through owning 5.1 million shares.
In a third quarter 20221 investor letter, Harding Loevner had the following to say about NVIDIA Corporation:
“The proliferation of devices using chips, whether EVs, “things” in lol, or embedded systems more generally, results in the generation of oceans of data potentially needing to be stored, processed, and analyzed. NVIDIA, the leading chip designer wellknown for its graphic processing units and its complementary CUDA software ecosystem, is at the forefront of the effort to provide the analytical platform needed to unlock the full potential of such specialist processors.”
Israel Englander’s Millennium Management is NVIDIA Corporation’s second largest investor after Fisher Asset Management through a $1.1 billion stake that comes via 3.8 million shares.
3. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Fisher Asset Management’s Stake Value: $2.8 billion
Percentage of Fisher Asset Management’s 13F Portfolio: 1.6%
Number of Hedge Fund Holders: 70
Advanced Micro Devices, Inc. is an American semiconductor designer whose products target both the central processing unit (CPU) and graphics processing unit (GPU) industries. The company has grown remarkably over the past couple of years due to a strong combination of product design and manufacturing technologies.
Fisher Asset Management owned 19.9 million Advanced Micro Devices, Inc. shares in Q4 2021 in a $2.8 billion stake that was significantly larger than the one the firm held in the company’s larger rival Intel Corporation. This signifies the firm’s strong confidence in Advanced Micro Devices, Inc.’s future. Out of the 924 hedge funds polled by Insider Monkey in the fourth quarter of last year, 70 had owned a stake in the company.
Advanced Micro Devices, Inc. posted $4.8 billion in revenue and $0.92 in non-GAAP EPS for its fourth fiscal quarter, beating analyst estimates for both in the form of record figures. Following this, the research firm Bernstein upgraded the company’s price target to $150 in February 2022, in a decade-first historic upgrade that saw the firm lament missed opportunities.
Carillon Tower Advisers commented on Advanced Micro Devices, Inc. in its Q4 2021 investor letter, outlining that:
“Advanced Micro Devices (AMD) supplies semiconductor chips for central processing units (CPUs) and graphic processing units (GPUs). The firm has been gaining share against its primary competitor in the datacenter server CPU space, as this rival has been unable to match the design and manufacturing capabilities of AMD and its partners. Investors are also looking forward to the closing of the previously announced merger with a semiconductor manufacturer that is another one of the portfolio’s holdings. The merger will increase AMD’s capabilities in the Field Programmable Gate Array (FPGA) chip space, and the combined company should possess the potential to win additional market share in the datacenter chip market.”
2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Fisher Asset Management’s Stake Value: $3.1 billion
Percentage of Fisher Asset Management’s 13F Portfolio: 1.74%
Number of Hedge Fund Holders: 75
Taiwan Semiconductor Manufacturing Company Limited is the world’s largest contract chipmaker. The company has gained fame globally through its strong manufacturing technologies which have allowed consumer electronics giants Apple, Inc (NASDAQ:AAPL) and Advanced Micro Devices, Inc. to push the latest products quickly to the market.
As its fourth fiscal quarter came to an end, the Taiwan Semiconductor Manufacturing Company Limited raked in $15.74 billion in revenue and $1.15 in GAAP EPS, beating analyst estimates for both during a time the industry is experiencing significant semiconductor shortages. In a note released in February 2022, Morgan Stanley upgraded the company’s share rating to Overweight, stating that the future holds significant demand for the company’s products, despite the worries of a chip correction in the industry.
Mr. Fisher’s investment firm owned 25.9 million Taiwan Semiconductor Manufacturing Company Limited shares in Q4 2021, for a massive $3.1 billion stake. This investment, the second largest in our list, highlights the firm’s interest in chip manufacturers as opposed to sellers, due to limited investment opportunities and future segment growth through government spending.
Taiwan Semiconductor Manufacturing Company Limited’s largest investor after Fisher Asset Management is Rajiv Jain’s GQG Partners. It owns 13.5 million shares worth $1.6 billion. 75 of the 924 hedge funds part of Insider Monkey’s Q4 2021 survey also held a stake in the company.
L1 Capital mentioned the Taiwan Semiconductor Manufacturing Company Limited in its third quarter 2021 investor letter. The firm stated that:
“Even though they are not majority State owned and we would expect many of China’s technology champions to continue to grow strongly, outcomes for shareholders may be unsatisfactory… The Fund has retained its investment in Taiwan Semiconductor Manufacturing Company (TSMC) which is well placed to maintain its global leadership in semiconductor manufacturing. Due to geopolitical risks, we limit the position size of TSMC in the Fund.”
1. ASML Holding N.V. (NASDAQ:ASML)
Fisher Asset Management’s Stake Value: $3.4 billion
Percentage of Fisher Asset Management’s 13F Portfolio: 1.9%
Number of Hedge Fund Holders: 41
ASML Holding N.V. is a Dutch company that is the only one in the world that manufactures advanced machines that are capable of fabricating semiconductors with advanced technologies. The company’s products are used by the world’s leading chipmakers, such as the Taiwan Semiconductor Manufacturing Company Limited and Intel Corporation.
As its fourth fiscal quarter came to an end, ASML Holding N.V. had earned €4.98 billion in revenue and €4.27 in GAAP EPS, missing analyst estimates for revenue. 41 of the 924 hedge funds surveyed by Insider Monkey in Q4 2021 owned the company’s shares, and research firm Jefferies initiated coverage of the company’s stock in February 2022 with a €700 price target.
Fisher Asset Management’s $3.4 billion stake in the company through owning 4.2 million shares reflects the firm’s keen eye on the chip sector. ASML Holding N.V. is the most important semiconductor company in the world due to it being the sole source for advanced chipmaking machines, and this stake, which is the largest among the investment firm’s semiconductor holdings, is reflective of this fact.
Polen Capital mentioned ASML Holding N.V. in its Q2 2021 investor letter. Here is what the firm said:
“Dutch technology company ASML is the world’s only supplier of photolithography systems to leading-edge semiconductor manufacturers. It is a gross simplification and a valid point to note that ASML’s technology enables the computing technology we use today. For years, ASML engineers bent the laws of physics and enabled Moore’s Law—which states that computer chips will become faster and cost less—to progress.
Incremental innovation gains mushroomed with the rollout of Extreme Ultraviolet (EUV) technology. We were impressed by management’s recent acknowledgment that demand for ASML’s lithography systems is exceeding their prior expectations. Recent announcements by management and major customers for ASML give us even more confidence in the sustainability of growth. We believe ASML could grow its earnings at a high-teens rate over the coming five years.”
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originally published on Insider Monkey.
