Market Overview

4 Semiconductor Stocks Fund Managers Are Buying Most

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4 Semiconductor Stocks Fund Managers Are Buying Most
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If you’re a trend follower, you’re probably wondering what the market’s cool kids are buying.

Among semiconductors, four names stand out. Large-cap fund managers took more new stakes in Broadcom Ltd (NASDAQ: AVGO), Lam Research Corporation (NASDAQ: LRCX), Advanced Micro Devices, Inc. (NASDAQ: AMD) and NVIDIA Corporation (NASDAQ: NVDA) than in any other sector stocks throughout September, according to Bank of America Merrill Lynch.

A Closer Look

  1. Broadcom: With 31-percent ownership and the highest of relative weightings, Broadcom is both well-liked and well-owned. Still, it “is under-owned versus QCOM despite a higher market cap and benefits from multiple potential catalysts, including 40-percent iPhone content growth, accretive Brocade closure [and] large dividend boost,” analysts Vivek Arya, Adam Gonzalez and Wills Miller wrote in a Tuesday note.
  2. Lam Research: Although the firm saw the second greatest increase in ownership in September, it ranks in the bottom half of the peer group with just 15.7 percent of funds containing stakes.
  3. AMD: AMD is also relatively unpopular. Analysts called the stock “aggressively under-owned and neglected,” as just 4.2 percent of fund managers hold positions. AMD also has the lowest relative weight among chipmakers — even after posting the largest month-over-month weightings increase.
  4. Nvidia: Also considered under-owned, the firm has seen a significant increase in fund manager stakes over the last year, from 13 percent to 23 percent.

What They Didn’t Like

Although QUALCOMM, Inc. (NASDAQ: QCOM) continued to boast the most diverse ownership with stakes by 32.8 percent of fund managers, the stock conceded more owners than any other firm month-over-month.

Meanwhile, managers changed little in their positions on Microchip Technology Inc. (NASDAQ: MCHP), whose sales growth capacity Merrill Lynch considers underappreciated.

How The Industry Is Doing

Based on analyst assessment, semiconductor stocks are equal in weight with the overall tech sector; below electronic components, internet and software stocks; and moderately ahead of communications equipment, hardware and information technology stocks.

Related Links:

AMD, Marvell Gain Semiconductor Share In Q3

Analysts More Positive On Nvidia, AMD Following Processor Conference

Latest Ratings for AMD

DateFirmActionFromTo
Oct 2017BarclaysMaintainsUnderweight
Jul 2017BairdInitiates Coverage OnOutperform
Jul 2017BMO CapitalDowngradesOutperformMarket Perform

View More Analyst Ratings for AMD
View the Latest Analyst Ratings

Posted-In: Adam Gonzalez Bank of America Merrill Lynch Merrill LynchAnalyst Color Long Ideas Analyst Ratings Tech Trading Ideas Best of Benzinga

 

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