In this article, we discuss the 5 best semiconductor stocks to buy for 2022. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Semiconductor Stocks to Buy for 2022.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 65
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. The stock has surged in the past few weeks amid reports that tech giant Meta will be using AMD chips, including the new Epyc chips, to power Meta data centers.
On November 9, Wedbush analyst Matt Bryson raised the price target on Advanced Micro Devices, Inc. (NASDAQ:AMD) stock to $165 from $140 and kept an Outperform rating, backing the firm to gain market share in the coming months.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD) with 19.6 million shares worth more than $2 billion.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Advanced Micro Devices, Inc. (NASDAQ:AMD) was one of them. Here is what the fund said:
“We also exited our positions in Advanced Micro Devices. Our investment campaign in Advanced Micro Devices (AMD) began in the second half of 2018, and we have seen a new management team reinvigorate the company’s product portfolio of microprocessors for PCs and servers, graphics processors, and video game consoles. These new, higher-margin products have helped the company partially close its margin gap with peers and capture share from market leader Intel. While we believe there is meaningful runway for further share gains and margin expansion, AMD has appreciated far beyond our mid-cap market cap mandate, and we exited our position.”
4. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 66
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. Media reports indicate that the company is planning to set up a chip making facility in Malaysia and will invest nearly $7 billion for the purpose.
Intel Corporation (NASDAQ:INTC) recently announced that it would be spinning off the self-driving unit of the company that is valued at over $50 billion, leading to a broader rally in chip stocks with Intel leading the way.
At the end of the third quarter of 2021, 66 hedge funds in the database of Insider Monkey held stakes worth $6.4 billion in Intel Corporation (NASDAQ:INTC), compared to 78 in the previous quarter worth $6.7 billion.
3. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 67
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. On December 10, the company revealed revenue and sales numbers for the month of November, reporting an 18.7% year-on-year increase in revenue and a 10.2% month-on-month increase in sales.
In early November, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) announced that it had agreed to invest $7 billion into a chipmaking plant in Japan along with electronics giant Sony. The deal is subject to regulatory approval.
At the end of the third quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $9.5 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 64 in the preceding quarter worth $10 billion.
In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of them. Here is what the fund said:
“Taiwan Semiconductor is the world’s largest outsourced foundry of logic semiconductor chips. TSMC’s shares appreciated 8.9% during the quarter.
Similar to last quarter, the supply-demand imbalance in semiconductor chips continues to benefit TSMC. To fuel new technological advances and meet the current supply imbalance, we see significantly increased capital spending across the industry over the coming years.
TSMC has an extraordinary track record of return on these large investments despite their rapid historical cadence of expansion. I remain hopeful that the large capital expenditure plan they now have ($100 billion of investment over the next three years) will be money well spent and not lead to industry oversupply in the medium term. Hopefully, future returns on these investments will look as good as those of the past.”
2. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 68
Applied Materials, Inc. (NASDAQ:AMAT) provides equipment, services, and software for the semiconductor industry. Gary Dickerson, the CEO of the firm, recently said that supply chain issues related to the chip industry would get better soon.
Applied Materials, Inc. (NASDAQ:AMAT) has a decent dividend history and recently declared a quarterly dividend of $0.24 per share, in line with previous. The forward yield was 0.66%. The company has a market cap of $137 billion.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Generation Investment Management is a leading shareholder in Applied Materials, Inc. (NASDAQ:AMAT) with 4.3 million shares worth more than $563 million.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 83
NVIDIA Corporation (NASDAQ:NVDA) operates as a visual computing firm. The company is expected to lead a broader rally in chip stocks over the next year as demand rises in light of “metaverse” spending by tech giants.
Tigress Financial analyst Ivan Feinseth recently raised the price target on NVIDIA Corporation (NASDAQ:NVDA) stock to $400 from $230 and kept a Buy rating, noting the strength of the firm in the data center and gaming market as a key growth catalyst.
At the end of the third quarter of 2021, 83 hedge funds in the database of Insider Monkey held stakes worth $10 billion in NVIDIA Corporation (NASDAQ:NVDA), compared to 86 the preceding quarter worth $9 billion.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
You can also take a peek at 10 Cheap Dividend Kings with Over 2% Yield and 12 Best Semiconductor Stocks To Invest In Right Now.
