Top 5 US semiconductor stocks to watch in 2022

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Top 5 US semiconductor stocks to watch in 2022

 Top 5 US semiconductor stocks to watch in 2022
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Highlights

  • NVIDIA Corporation (NASDAQ: NVDA) has a P/E ratio of 85.35.
  • Broadcom Inc. (NASDAQ: AVGO) stock’s dividend yield is 2.65%, with an annualized dividend of US$16.40 and a P/E ratio of 41.41.
  • Texas Instruments Incorporated (NASDAQ: TXN) has a P/E ratio of 23.49 and dividend yield of 2.56%.

Technology stocks fell on January 10. The Nasdaq Composite Index closed up by 0.05%, showing a recovery towards the end of the day.

Technology stocks wavered; however, semiconductor stocks rose to push the index higher. Semiconductors are used in almost everything electronic, ranging from consumer appliances and laptops to electric vehicles.

The shortage has made the companies feel headwinds, but demand remains intact. The supply is limited, and demand constant, so, in the coming times, the segment may go up, as per experts. 

Also Read: Seven hottest IPOs to explore in 2022

Here we discuss the top five semiconductor stocks based on market capitalization that remained in the green last year.  

NVIDIA Corporation (NASDAQ: NVDA)

Santa Clara, California-based Nvidia designs graphics processing units (GPU) to enhance experience on computing platforms.  The chips are used in PCs for gaming, data centers and automotive infotainment systems.

The company is broadening its focus and entering into other applications including artificial intelligence and autonomous driving, where its GPU's high capabilities can be leveraged.

Nvidia has a market capitalization of US$692 billion with a P/E ratio of 85.35 and a forward P/E for one year of 75.69. Its dividend yield is 0.06%, with an annualized dividend of US$0.16. 

For the nine months ended October 31, 2021, the company earned revenue of US$19.27 billion compared to US$11.67 billion for the corresponding nine months in 2020. The net income was US$6.75 billion or US$2.67 per share diluted compared to US$2.87 billion or US$1.15 per share diluted for the same period in 2020. 

The stock closed at US$274 on January 10.

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 (Top Semiconductor stocks to consider in 2022)

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Broadcom Inc. (NASDAQ: AVGO)

The company is based in San Jose, California. The company’s product portfolio consists of various products, including radiofrequency filters and amplifiers. These are used in high-end smartphones, as well as an assortment of wired infrastructure solutions, enterprise storage and industrial end markets. 

Broadcom’s market capitalization is US$256.5 billion with a P/E ratio of 41.41 and a forward P/E for one year of 20.93. Its current dividend yield is 2.65%, with an annualized dividend of US$16.40.  

For the fiscal year ended October 31, 2021, it earned revenue of US$27.4 billion compared to US$23.9 billion in fiscal 2020, reflecting a 15% increase YoY. Its net income came in at US$6.7 billion or US$15.00 per share diluted in FY 2021 compared to US$2.96 billion or US$6.33 per share diluted for FY 2020.

The stock closed at US$621.16 on January 10, 2022.

Also Read: Stocks that could give FAANG companies a run for money

Intel Corporation (NASDAQ: INTC)

Santa Clara, California-based Intel Corporation is one of the largest chipmakers globally. The company designs and manufactures microprocessors for personal computers and data center markets. 

The company has a market capitalization of US$224.5 billion. Its P/E ratio is 10.72, and a forward P/E for one year of 10.12. The dividend yield is 2.6%, with an annualized dividend of US$1.39. 

For the nine months ended September 25, 2021, the company earned a revenue of US$58.5 billion and a net income of US$15.25 billion. The revenue and net income for the nine months in 2020 were US$57.89 billion and US$15.04 billion, respectively. The earnings per share diluted grew to US$3.73 compared to US$3.52 in nine months period of 2020. 

The stock closed at US$55.21 on January 10, 2022.

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QUALCOMM Incorporated (NASDAQ: QCOM)

The technology company designs chips for smartphones and develops and licenses wireless technology. Its patents are related to CDMA and OFDMA technologies. It is the world’s largest wireless chip vendor and a leader in 5G technology, along with selling RF-front end modules in smartphones and automotive and IoT market chips. Qualcomm’s headquarter is based in San Diego, California.

Qualcomm has a market capitalization of US$201.2 billion. Its P/E ratio is 22.83, and a forward P/E for one year is 18.85. The dividend yield is 1.51%, with an annualized dividend of US$2.72. 

For the fiscal year ended September 26, 2021, its revenue was US$33.57 billion compared to US$23.53 billion in the fiscal year 2020. The net income of the company was US$9.04 billion for FY 2021 compared to US$5.2 billion for FY 2020. The earnings per share diluted was US$7.87 for FY 2021 versus US$4.52 for FY 2020.

The stock closed at US$179.68 on January 10.

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Top Semiconductor stocks to consider in 2022

Source - Pixabay

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Texas Instruments Incorporated (NASDAQ: TXN)

Texas Instruments makes analog chips for processing real-world signals such as power and sound. The company also makes digital signal processors used in wireless communications and microcontrollers in varied electronics applications. 95% of the Dallas-based company’s revenue comes from semiconductors and the remaining 5% from popular calculators.

Texas Instruments’ current market capitalization is US$168.97 billion. Its P/E ratio is 23.49, and a forward P/E for one year is 22.60. The dividend yield is 2.56%, with an annualized dividend of US$4.60. 

It will release its fourth quarter and fiscal year 2021 results on January 25, 2022.

For the quarter ended September 30, 2021, it reported revenue of US$4.6 billion compared to US$3.8 billion in the same quarter a year ago, showing a 22% increase YoY. Net income grew 44% in the third quarter of 2021 to US$1.95 billion or US$2.07 per share diluted compared to US$1.35 billion or US$1.45 per share diluted in the same period in 2020. 

The stock closed at US$182.96 on January 10.

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Bottom line

The Dow Jones U.S. Semiconductors Index generated a 34.89% return in one year, performing better than NASDAQ Composite Index that gave 14.31% in one year. However, one should apply due diligence while choosing stocks from different segments.

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