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NVIDIA, Qualcomm, Advanced Micro Devices, Broadcom and Analog Devices

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Chicago, IL – December 17, 2021 – announces the list of stocks featured on the Analysts Blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Recent actions featured in the blog include: NVIDIA Corporation NVDA, Advanced Micro Devices Inc. AMD, QUALCOMM Inc. QCOM, Analog Devices Inc. ADI, and Broadcom Inc. AVGO.

Here are highlights from Thursday’s analyst blog:

Fed sets the stage for year-end rally: Top 5 picks

On December 15, Wall Street saw a rally of relief after the Fed released its last FOMC meeting statement of 2021. The outcome of the FOMC meeting was in line with market expectations. In fact, the adjustment for a more hawkish Fed was already factored into the valuation of the stock markets. As a result, Wall Street saw a strong move north as a large chunk of investors were unsure of a more aggressive Fed.

The stage is set for a year-end rally on Wall Street, as the Fed has lifted uncertainties over the movement in short-term interest rates and the resurgence of the Omicron variant of the coronavirus has so far had little. impact on the global economy. Therefore, it will be prudent to invest in dynamic / growth stocks with a favorable Zacks ranking. We will discuss five of these stocks, namely NVIDIA, Advanced micro-systems, QUALCOMM, Analog devices and Broadcom.

Fed clears investor worries

Fed Chairman Jerome Powell said in his post FOMC statement that the central bank will increase the reduction in the monthly bond buying program from $ 15 billion per month to $ 30 billion per month starting in January. 2022. At this rate, the quantitative easing program will end in March 2022.

Regarding an interest rate hike, Powell said, “We are in a position where we will end our reduction by March, in two meetings, and we will be able to raise rates. interest as and when we deem it appropriate. . “

However, the Fed’s dot-plot indicated that the 18 members expect at least one rate hike in 2022. Of the 18 Fed members, 12 expect three rate hikes in 2022, followed by two more rate hikes in 2023 and 2024.

Importantly, the FOMC statement reiterated that the Fed will maintain its existing benchmark lending rate of 0 to 0.25 percent that it set in March 2020 “until labor market conditions reach levels consistent with the Committee’s assessments of maximum employment “.

According to the Fed, headline PCE inflation will remain at 5.3% in 2021 but will decline to 2.6% in 2022. Core PCE inflation – the Fed’s preferred inflation gauge – is expected to stay at 2.7% in 2022. The unemployment rate is expected to drop from around 4.3% in 2021 to 3.5% in 2022.

Markets express a sigh of relief

Wall Street’s impressive bull run since the start of the year has suffered setbacks since Black Friday due to the resurgence of the coronavirus and the Fed Chairman’s indication to shift to more hawkish and aggressive policies upon of the December FOMC meeting.

Concerns about Omicron have already faded as available data shows its lesser seriousness. On December 15, the Fed allayed market participants’ concerns about the movement of short-term market interest rates, setting the stage for a year-end rally.

As a result, the three major stock indexes – the Dow, S&P 500 and Nasdaq Composite – rose 1.1%, 1.6% and 2.2% respectively. These indices posted the best daily gain in a week and the best performance on a Fed meeting day since November 5, 2020.

Surprisingly, the tech sector, which is expected to be hit the hardest due to a hike in market interest rates, gained the most on December 15. In addition to the technology-intensive Nasdaq Composite, the Technology Select Sector SPDR, one of the 11 major sectors of the market’s benchmark, the S&P 500, jumped 2.7%. The Philadelphia Semiconductor Index climbed 3.7%.

Our top picks

We’ve narrowed down our search to five semiconductor giants (market capital> $ 50 billion) that have strong growth potential for the remainder of 2021. These stocks have had their earnings estimates revised in the past 30 days. Each of our picks carries a Zacks Rank # 2 (Buy). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

NVIDIA benefits from the wave of work and home learning induced by the coronavirus. NVIDIA is also benefiting from strong growth in GeForce GPUs for desktops and notebooks, boosting gaming revenue. Additionally, increased Hyperscale demand remains positive for NVIDIA’s Data Center business.

The expansion of NVIDIA GeForce NOW is expected to boost its user base. Additionally, the strong adoption of AI-powered smart cockpit infotainment solutions is a boon. The collaboration with Mercedes-Benz, owned by Daimler, is expected to strengthen NVIDIA’s presence in autonomous vehicles and other automotive electronics spaces.

NVDA has an expected profit growth rate of 73.2% for the current year (end of January 2022). Zacks’ consensus estimate for current year earnings has improved 4.6% in the past 30 days.

Qualcomm is well positioned to benefit from strong 5G traction with greater visibility to meet its long-term revenue goals. For calendar year 2021, 5G handsets with Qualcomm chips are expected to experience 150% year-over-year growth midway through to around 450-550 units.

Qualcomm has raised the bar for driverless cars with the launch of the first-of-its-kind automotive platform, Snapdragon Ride, which enables automakers to turn their vehicles into self-driving cars using AI.

QCOM has an expected profit growth rate of 22.8% for the current year (ending September 2022). Zacks’ consensus estimate for current year earnings has improved 1.5% in the past 30 days.

Advanced micro-systems is based on the robust performance of the IT and Graphics, and Embedded and Semi-Personalized Enterprise segments. AMD is benefiting from strong sales of its Ryzen and EPYC server processors, due to the growing proliferation of AI and machine learning in industries such as cloud, gaming and supercomputing.

The growing weight of 7 nanometer products in the vertical data center industry, driven by trends in work from home and e-learning, is a key enabler. Advanced Micro Devices has raised its revenue forecast for 2021 due to strong growth across all businesses.

AMD has an expected profit growth rate of over 100% for the current year. Zacks’ consensus estimate for current year earnings has improved 0.4% in the past 7 days.

Broadcom builds on a continuing strength in the semiconductor solutions and infrastructure software industries. In the fourth quarter of fiscal 2021, Semiconductor’s revenues benefited from higher demand for wireless solutions and continued momentum in networking and broadband solutions.

AVGO’s network revenues were driven by the routing of service providers in the expansion of 5G networks for backhaul, metro and calls, as well as by significant share gains in Ethernet network interface controllers. within data centers. Synergies from CA acquisitions and Symantec’s corporate security activities contributed to Broadcom’s results. In addition, optimistic first quarter forecasts for strong growth in broadband, networking and wireless revenues are encouraging for AVGO.

Broadcom has an expected profit growth rate of 17.9% for the current year (ending October 2022). Zacks’ consensus estimate for current year earnings has improved 6.2% in the past 7 days.

Analog devices has strength in the communications, consumer, industrial and automotive end markets. In addition, strong demand for high performance analog and mixed signal solutions has been a positive wind. The growing momentum in the field of electric vehicles through robust battery management system solutions remains a positive for ADI.

Additionally, increasing power design gains are the other bright spots for Analog Devices. The solid momentum of the HEV platform in the cabin electronics ecosystem remains a tailwind for ADI. Additionally, Analog Devices remains optimistic about the growth prospects associated with its acquisition of Maxim and 5G.

ADI has an expected earnings growth rate of 16.7% for the current year (ending October 2022). Zacks’ consensus estimate for current year earnings has improved 4.4% in the past 30 days.

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