On Friday, semiconductor giant Intel Corporation (NASDAQ:INTC) saw target price raises and rating upgrades by investment firms Bernstein and RBC. The Bernstein analyst raised Intel’s target price by more than 15% and raised its rating to Market Perform from Underperform.
Also, RBC analyst, Amit Daryanani, raised Intel’s target price by 3% to $33 and gave a Sector Perform rating on the stock.
Following the upgrades, investors reacted positively and Intel share price was up more than 2%.
iPhone 7 Modems to Drive Intel Sales
Intel is the leader in sales of computer microprocessors. The analysts believe that though Intel may have missed the mobile revolution, it is on track to catch up with expected incremental revenues from the new iPhone this year.
Reportedly, Intel is expected to supply a third of Apple's (NASDAQ:AAPL) iPhone 7 modems, partially replacing the incumbent Qualcomm (NASDAQ:QCOM). The analysts believe that this tailwind from iPhone 7 should provide an upside to Intel's client computing group (CCG) sales in the second quarter.
Additionally, the analysts are also positive about the new agreement with visual analytics company, Mobileye N.V. (NYSE:MBLY) to develop the self-driving car technology for luxury carmaker BMW. Intel and Mobileye will provide the underlying technology for BMW's iNEXT, a completely autonomous car, which is expected to release by 2021. This deal could help Intel to increase its market share in the fast-growing, self-driving technology space and thereby diversify its revenue base.
The analysts believe that Intel is well positioned to take advantage of these new trends. They therefore expect strong earnings for the second quarter and a better-than-consensus guidance for the third quarter.
Intel Projects In-Line Revenues for Q2
For the second quarter ended in June, Intel expects revenues of around $13.5 billion (+/-$500 million), up 2.3% from the June quarter of 2015. The Zacks Consensus Estimate for second-quarter 2016 is also pegged at $13.5 billion.
For full-year 2016, Intel expects revenues of $57.08 billion, pointing to an increase of 3.1% from the prior year. The Zacks Consensus Estimate for the full year is pegged at $57.1 billion.
Intel, which carries a Zacks Rank #2 (Buy), is slated to report second-quarter 2016 results on Jul 20.
Other Options
We have four other alternative semiconductor stocks which, like Intel, look quite promising right now. Based on growth, earnings data and favorable Zacks Rank, we have picked four stocks that have the potential to yield solid returns over the next 1–3 months.
DSP Group Inc. (NASDAQ:DSPG)
DSP Group, Inc. is a fabless semiconductor company that offers advanced chip-set solutions for a variety of applications. The company’s ICs are used in MP3 players, VoIP Phones, Gateways, Integrated Access Devices and Digital Voice Recorders.
The company has an expected EPS growth rate of 15.0%.
DSP Group is a Zacks Rank #1 (Strong Buy) stock and, over the past 60 days, saw one positive estimate revision for the current year. The company has seen no negative estimate revision in the last two months.
Semtech Corporation (NASDAQ:SMTC)
Semtech Corporation manufactures a wide range of analog and mixed-signal semiconductors, including Standard Semiconductor Products, Rectifier and Assembly Products and Other Products. The company’s new design wins, product introductions and solid execution should boost revenues and margins going forward.
The company has an expected EPS growth rate of 5.0%.
Semtech Corporation carries a Zacks Rank #2 and received one positive estimate revision for the current year, over the last 60 days. The company saw no negative estimate revision in the last two months.
The Zacks Consensus Estimate climbed 2.9% in the last 60 days to its current level of $1.06 a share for the current year.
NVIDIA Corporation (NASDAQ:NVDA)
NVIDIA Corporation designs, develops and markets a complete family of award-winning 3D graphics processors, graphics processing units and related software that set the standard for performance, quality and features for every type of desktop personal computer user, from professional workstations to low-cost computers.
The company has an expected EPS growth rate of 9.30%.
The Zacks Rank #2 stock received 10 positive estimate revisions for the upcoming quarter and 11 positive estimate revisions for fiscal 2017 over the last 60 days.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Taiwan Semiconductor Manufacturing Company manufactures semiconductors using its advanced production processes based on its own or third-party proprietary integrated circuit designs. The company offers a range of wafer-fabrication processes, including those required to manufacture complementary metal oxide semiconductor (CMOS) logic, mixed-signal, radio frequency, and embedded memory bipolar CMOS mixed-signal and other semiconductors.
The company has an expected EPS growth rate of 15.0%.
Over the past 60 days, this Zacks Rank #2 stock saw one positive estimate revision for the current year. The company has received no negative estimate revision over the same time frame.
The Zacks Consensus Estimate climbed 3.3% to its current level of $1.90 a share for the current year.
DSP GROUP INC (DSPG): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
NVIDIA CORP (NVDA): Free Stock Analysis Report
SEMTECH CORP (SMTC): Free Stock Analysis Report
TAIWAN SEMI-ADR (TSM): Free Stock Analysis Report
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