In this article, we will look at the 5 best cheap semiconductor stocks to buy and hold. If you want to explore more semiconductor stocks that have strong long-term growth stories, you can read 10 Best Cheap Semiconductor Stocks to Buy and Hold.
5. Lam Research Corporation (NASDAQ:LRCX)
PE Ratio as of August 29: 13.81
Number of Hedge Fund Holders: 56
On July 27, Lam Research Corporation (NASDAQ:LRCX) reported its financial results for the fourth quarter of its fiscal 2022. The company reported earnings per share of $8.83, outperforming expectations by $1.50. The company’s revenue for the quarter amounted to $4.64 billion, up 11.83% year-over-year, and beating Wall Street estimates by $422 million.
For the first quarter of fiscal 2023, Lam Research Corporation (NASDAQ:LRCX) expects its earnings per share to range between $8.75 and $10.25, while revenue is expected to range between $4.6 billion and $5.2 billion. Wall Street expects the company to deliver EPS of $8.82 and revenue of $4.63 billion.
On July 28, Wells Fargo analyst Joe Quatrochi raised his price target on Lam Research Corporation (NASDAQ:LRCX) to $475 from $460 and maintained an ‘Equal Weight’ rating on the shares.
On August 25, Lam Research Corporation declared a quarterly cash dividend of $0.225 per share, up 15% from its prior dividend of $1.50 per share. The dividend is payable on October 5 to investors of record on September 14. As of August 29, Lam Research Corporation (NASDAQ:LRCX) is trading at a PE multiple of 13.8-times earnings and the shares offer a forward dividend yield of $1.29%, which the company backs with free cash flow of $2.55 billion.
At the close of Q2 2022, 56 hedge funds were bullish on Lam Research Corporation (NASDAQ:LRCX), holding stakes worth $2.66 billion. Of those, Fisher Asset Management was the largest shareholder in the company with a stake worth $849 million. The investment covers 0.6% of Ken Fisher’s 13F portfolio.
Here is what Artisan Partners had to say about Lam Research Corporation (NASDAQ:LRCX) in its second-quarter 2022 investor letter:
“Lam is one of the world’s largest suppliers of semiconductor wafer fabrication equipment (WFE). Manufacturing semiconductors is incredibly complex with tolerances measured in nanometers. Consistent improvements in technology are necessary for manufacturers to improve the cost, functionality and volume of semiconductors. WFE manufacturers such as Lam provide the necessary machines and technology. The WFE industry is highly consolidated with only five global players holding more than two thirds of the market. Because of the value-added nature of the equipment and services, the industry is highly profitable with margins and returns on capital that most CEOs can only dream of.”
4. Intel Corporation (NASDAQ:INTC)
PE Ratio as of August 29: 7.15
Number of Hedge Fund Holders: 65
On August 23, Intel Corporation (NASDAQ:INTC) announced that it has signed an agreement with Brookfield Infrastructure Partners (NYSE:BIP) by which Brookfield Infrastructure Partners (NYSE:BIP) will invest roughly $15 billion to help Intel Corporation (NASDAQ:INTC) expand its operations. Intel Corporation (NASDAQ:INTC) will fund 51% of its factory expansion at the company’s Ocotillo campus in Arizona, with Brookfield Infrastructure Partners investing the other 49%. The transaction is expected to close in the second half of 2022.
This August, it was reported in a regulatory filing that Patrick Gelsinger, CEO of Intel Corporation (NASDAQ:INTC), purchased 14,800 common shares of the company’s stock at $33.86 per share, for a total amount of $0.50 million.
On August 1, Northland analyst Gus Richard maintained his buy-side ‘Outperform’ rating and $55 price target on Intel Corporation (NASDAQ:INTC). As of August 29, Intel Corporation (NASDAQ:INTC) is trading at a PE ratio of 7.15x and shares offer a forward dividend yield of 4.38%.
At the close of Q2 2022, 65 hedge funds held stakes in Intel Corporation (NASDAQ:INTC) worth $2.53 billion. As of June 30, Generation Investment Management owns roughly 14.8 million shares of Intel Corporation (NASDAQ:INTC) and is the largest shareholder in the company. The fund’s stake is valued at $553 million.
Here is what the Baron Funds had to say about Intel Corporation (NASDAQ:INTC) in its first-quarter 2022 investor letter:
“Intel’s (NASDAQ:INTC) capital spending process is guided by a process they appropriately named “copy exactly.” This means that they attempt to “copy exactly” what they have already built and attempt to improve tried and true processes iteratively.”
3. Applied Materials, Inc. (NASDAQ:AMAT)
PE Ratio as of August 29: 13.16
Number of Hedge Fund Holders: 67
On August 18, Applied Materials, Inc. (NASDAQ:AMAT) reported market-beating earnings for its fiscal third quarter of 2022. The company reported earnings per share of $1.94, which beat estimates by $0.05. The company’s revenue came in at $6.52 billion, up 5.23% year-over-year, and topping expectations by $252 million.
Wall Street is bullish on Applied Materials, Inc. (NASDAQ:AMAT). On August 19, Deutsche Bank analyst Sidney Ho raised his price target on Applied Materials, Inc. (NASDAQ:AMAT) to $115 and reiterated a ‘Buy’ rating on the shares. On August 21, BofA analyst Vivek Arya raised his price target on Applied Materials, Inc. (NASDAQ:AMAT) to $125 from $118 and also maintained a ‘Buy’ rating on the shares.
As of August 29, Applied Materials, Inc. (NASDAQ:AMAT) has a trailing twelve-month PE ratio of 13.16x. AMAT shares offer a forward dividend yield of 1.05%, which the company supports with free cash flow of $4.92 billion.
At the end of Q2, 67 hedge funds were long Applied Materials, Inc. (NASDAQ:AMAT), owning stakes worth $3.68 billion. Of those, Generation Investment Management was the top stakeholder in the company with a position worth $555 million.
2. Micron Technology, Inc. (NASDAQ:MU)
PE Ratio as of August 29: 6.63
Number of Hedge Fund Holders: 69
On July 6, Micron Technology, Inc. (NASDAQ:MU) launched its DDR5 server DRAM for commercial and industrial applications. The company’s new DRAM delivers a performance speedup of 85% over its previous generations of DDR4 DRAM. The company’s DDR5 DRAM is one of the most high-end memory-efficient rams on the market for applications of artificial intelligence, high-performance computing, and other data-intensive use cases.
On July 26, Micron Technology, Inc. (NASDAQ:MU) commenced full-volume production of its 232-layer NAND. This is the first 232-layer NAND on the market and is designed to deliver higher areal density and capacity, together with improved energy efficiency over the company’s previous NANDs.
On August 10, Deutsche Bank analyst Sidney Ho lowered his price target on Micron Technology, Inc. (NASDAQ:MU) to $68 from $70 and maintained a ‘Buy’ rating on the shares.
As of August 29, Micron Technology, Inc. (NASDAQ:MU) has a trailing twelve-month PE ratio of 6.63x, while its shares boast a forward dividend yield of 0.80%, which the company supports with free cash flow of $4.81 billion.
At the close of the second quarter of 2022, 69 hedge funds were bullish on Micron Technology, Inc. (NASDAQ:MU), holding stakes worth $2.16 billion. Of those, Matrix Capital Management was the top stakeholder in the company with a position worth $221 million. As of June 30, the fund owns 4 million shares of Micron Technology, Inc. (NASDAQ:MU).
1. QUALCOMM, Incorporated (NASDAQ:QCOM)
PE Ratio as of August 29: 12.25
Number of Hedge Fund Holders: 71
On July 27, QUALCOMM Incorporated (NASDAQ:QCOM) announced market-beating results for the third quarter of its fiscal 2022. The company’s EPS of $2.96 beat expectations by $0.09, while its revenue amounted to $10.9 billion, up 36.69% year-over-year, and beating Wall Street estimates by $74.5 million.
Wall Street is bullish on QUALCOMM Incorporated (NASDAQ:QCOM), as on July 28, Edward Jones analyst Logan Purk upgraded QUALCOMM Incorporated (NASDAQ:QCOM) to ‘Buy’ from ‘Hold’. The analyst said that the stock’s current valuation has not priced in its industry-leading position in 5G technology. Also on July 28, Mizuho analyst Vijay Rakesh raised his price target on QUALCOMM Incorporated (NASDAQ:QCOM) to $175 from $168 and maintained a ‘Buy’ rating on the shares.
On August 18, Bloomberg reported that QUALCOMM Incorporated (NASDAQ:QCOM) is working towards making a comeback in the $28 billion server industry. In March 2021, QUALCOMM Incorporated (NASDAQ:QCOM) acquired chip start-up NUVIA, and the company is reportedly now on the lookout for clients that are in need of NUVIA’s server chips. Amazon.com, Inc. (NASDAQ:AMZN) has agreed to test QUALCOMM Incorporated’s (NASDAQ:QCOM) server chip offerings.
At the close of Q2 2022, 71 hedge funds were long QUALCOMM Incorporated (NASDAQ:QCOM) with stakes worth $2.80 billion. Of those, Alkeon Capital Management was the most prominent stakeholder, with a $541 million in the stock.
You can also take a look at 10 Semiconductor Stocks With Growth Potential and 10 Semiconductor Stocks to Buy Under $50.
