Nvidia Left Out, But These Chip Stocks Make The Cut As Barclays' Preferred Picks: 'There Isn't A Ton Of Low-Hanging Fruit At These Levels'
Portfolio Pulse from Shanthi Rexaline
Barclays analyst Tom O'Malley remains positive on semiconductor stocks levered to the '2nd Wave of AI' despite viewing the sector as expensive on 2024 estimates. He prefers names like AMD, Camtek, Coherent, Marvell Technology, NXP Semiconductor, and Western Digital, upgrading ratings and price targets. AMD is expected to lead in AI revenue, potentially overcoming Nvidia's software barrier. The iShares Semiconductor ETF (SOXX) also saw a recent uptick.
January 17, 2024 | 11:07 am
News sentiment analysis
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POSITIVE IMPACT
Barclays maintains an Overweight rating on AMD with a price target increase from $120 to $200, expecting a significant AI revenue run-rate increase by 2025.
AMD's expected leadership in AI revenue growth and the raised price target by Barclays suggest a positive short-term impact on the stock.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Camtek upgraded from Equal Weight to Overweight by Barclays with a price target increase from $65 to $82, expected to benefit from AI chip demand.
Camtek's upgrade and price target increase reflect a positive outlook due to its role in AI chip production, suggesting a bullish short-term impact.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Coherent's stock upgraded from Equal Weight to Overweight by Barclays with a price target increase from $38 to $60, expected to benefit from AI interconnection devices.
Coherent's upgrade and price target increase are due to its potential gains from AI interconnection devices, indicating a positive short-term impact.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Marvell Technology maintains its Overweight rating with a slight price target increase from $70 to $75 by Barclays, expected to benefit from AI.
Marvell's maintained Overweight rating and increased price target suggest a continued positive outlook, especially related to AI, for short-term impact.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 70
POSITIVE IMPACT
NXP Semiconductor upgraded from Equal Weight to Overweight with a price target increase from $200 to $260 by Barclays, seen as well-positioned among auto chip suppliers.
NXP's upgrade and significant price target increase reflect a strong position in the auto chip market, indicating a positive short-term impact on the stock.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 80
POSITIVE IMPACT
The iShares Semiconductor ETF (SOXX) saw an uptick, ending a recent session up 1.42% at $565.29, reflecting positive sentiment in the semiconductor sector.
The increase in SOXX's value indicates a positive market reaction to the semiconductor sector, which may continue in the short term.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 60
POSITIVE IMPACT
Western Digital upgraded from Equal Weight to Overweight with a price target increase from $45 to $65 by Barclays, expected to benefit from a return of flash and HDD demand.
Western Digital's upgrade and price target increase are based on the expected return of demand for storage solutions, suggesting a positive short-term impact.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
Nvidia may face challenges from AMD in AI, despite its current lead, as customers desire a second source, potentially impacting Nvidia's short-term outlook.
Nvidia's position as a leader in AI may be threatened by AMD's growth, as indicated by Barclays, which could lead to a negative short-term impact on NVDA's stock.
CONFIDENCE 70
IMPORTANCE 85
RELEVANCE 80