For immediate release
Chicago, IL – July 28, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: NeoPhotonics Corporation NPTN, Silicon Laboratories Inc. SLAB, Analog Devices ADI, and Vishay Intertechnology, Inc. VSH.
Here are highlights from Wednesday’s analyst blog:
4 Semiconductor Stocks to Watch on Growth Prospects
The US Senate voted 64-32 on July 26 to advance a key bipartisan bill that would boost domestic semiconductor manufacturing and help the country compete with China. The $280 billion package will take the form of grants and research funding.
As the Internet of Things (IoT), artificial intelligence and virtual reality gain prominence, the demand for microchips has steadily grown. This has led to a severe shortage of semiconductors globally. The new bill, which is expected to pass by the end of this week, should not only boost semiconductor production but also help ease the current shortage. Given this situation, actions like NeoPhotonics Company, Silicon Laboratories Inc., Analog devices and Vishay Intertechnology, Inc. should benefit in the near term.
Semiconductor manufacturing to get a boost
The legislation will provide $52 billion in subsidies to the US semiconductor industry and, in turn, a major boost to production. In addition, it will provide $24 billion as an investment tax credit to semiconductor factories.
The legislation comes as President Joe Biden and other experts have said it is of the utmost importance for economic and national security as the world becomes increasingly dependent on technology. Thus, the bill will help the United States to be more self-sufficient.
The bill is also expected to alleviate the global shortage of semiconductors that began at the height of the pandemic and continues. Semiconductor shortages have already hampered production in sectors like automobiles, consumer electronics, high-tech weapons and medical equipment, forcing several manufacturers to cut production.
Semiconductor industry poised to grow
The US semiconductor industry was already doing well but is still behind China in terms of production. The bill should now help the United States compete with China in terms of manufacturing and production.
The bill comes just at a time when semiconductor makers are struggling to meet growing demand for chips. Since the start of the pandemic, the semiconductor industry has been facing a supply chain crisis. As demand soars, several industries have been brought to a standstill due to a shortage of supply.
This, on the other hand, higher demand boosted semiconductor sales. Global semiconductor sales rose 18% year-over-year in May to $51.8 billion from $43.9 billion in May 2021, according to the SIA. Global semiconductor sales rose 18% year-over-year in May to $51.8 billion from $43.9 billion in May 2021, according to the SIA.
Semiconductor sales rose more than 20% month-over-month, for the 14th consecutive month now. This reflects the underlying strength of the sector as well as the continued increase in demand for semiconductors.
The supply crisis is far from over, but the new bill should significantly alleviate this problem, which will only help the industry in the coming days.
Stocks to Watch
The semiconductor industry is only expected to benefit in the short term, given the growing demand for semiconductors. The new bill, meanwhile, will further boost production and should make the United States more self-sufficient. Given this scenario, these four chip stocks should benefit in the near term.
NeoPhotonics Company is engaged in the design and manufacture of photonic integrated circuit, or PIC, modules and subsystems for high-speed, bandwidth-intensive communication networks. Products offered by NPTN include high-speed products that enable data transmission at 10 Gbps, 40 Gbps, and 100 Gbps, agility products such as ROADMs that dynamically allocate bandwidth for s adapt to volatile traffic patterns, and access products that deliver high-speed connections to more devices and people. on fixed and wireless networks.
NeoPhotonics Corporation’s expected profit growth rate for the current year is over 100%. Shares of NPTN have gained 3.2% over the past three months. NeoPhotonics Corporation has a Zacks Rank #2 (Buy).
Silicon Laboratories Inc. is a leading provider of silicon, software and solutions for the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. SLAB solves the electronics industry’s toughest problems, providing customers with significant benefits in performance, power savings, connectivity and design simplicity.
Silicon Laboratories’ forecast earnings growth rate for the current year is 66.4%. Shares of SLAB have gained 8.9% over the past three months. Silicon Laboratories has a #2 Zacks rank.
Analog devices is an original equipment manufacturer of semiconductor devices, particularly analog, mixed-signal and DSP integrated circuits. The ADI product line consists of amplifiers and comparators; analog-to-digital converters; digital to analog converters; video encoders and decoders; embedded processing and DSP products; MEMS and temperature sensors; RF/IF components and converters; Power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors. Analog Devices has manufacturing facilities in the United States, Ireland and Southeast Asia.
Analog Devices’ expected profit growth rate for the current year is 42.9%. ADI shares have gained 8.5% over the past three months. Analog Devices carries a Zacks rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vishay Intertechnology, Inc. is a global manufacturer and supplier of semiconductors and passive components. VSH’s products include metal oxide semiconductor field effect transistors, diodes and optoelectronic components.
Vishay Intertechnology’s forecast earnings growth rate for the current year is 15.5%. Shares of VSH have gained 5.8% over the past three months. Vishay Intertechnology wears a No. 3 Zacks rank.
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