We continue to see signs that the U.S. economy is picking up steam as head into the end of year, which is great news for an industry that many had left for dead not too long ago.
Semiconductors are in just about everything we buy, from our personal computers to home appliances and just about everything in between. When the economy gains strength, the chip-making industry feels the effects right away, and sales and profits begin to grow rapidly.
Just last week, a major industry association raised estimates for semiconductor sales for 2015. World Semiconductor Trade Statistics raised estimates for 2015 and expects 9% growth in semiconductor sales in 2015 with all products and regions showing steady growth. As investors, we can use Portfolio Grader to find those semiconductor stocks that will lead the way higher.
Here are three tech stocks that prove how well the semiconductor industry is doing:
Intel Corporation (INTC)
I have lost track of how many times over the past decade I have been told that Intel Corporation (INTC) had passed its prime and was no longer a leading tech stock. Every time I have heard it, Intel has come back to take market share from its competitors wide range of markets from mobile to gaming and everything in between.
Recently, Intel has been expanding to capture a larger share of China’s mobile device chip market and increase its capacity to produce chips for tablets running an the Android operating system. In the last month analysts, have been increasing their estimates for Intel stock earnings in the full year 2014 and 2015.
Portfolio Grader raised Intel stock to an A ranking back in July, and Intel is still a “strong buy” as INTC fundamentals continue to improve.
Tower Semiconductor Ltd. (USA) (TSEM)
Tower Semiconductor Ltd. (USA) (TSEM) makes analog intensive mixed-signal semiconductor devices that are used in some of the hottest sectors of the marketplace like personal electronics, automobiles and medical devices.
TSEM posted a 75% positive earnings surprise last quarter, and analysts expect big things from Tower this quarter as well. The consensus estimate is for Tower to earn 57 cents per share compared to last years 34 cents per share. Analysts have been raising their estimates for TSEM for the quarter as well as full year 2015. So, I will not be shocked to see another huge positive earnings surprise from Tower.
Portfolio Grader picked up on the continued improvement in TSEM stock’s fundamentals and upgraded Tower stock to an A last month. TSEM stock remains a “strong buy” at the current price.
Ambarella Inc (AMBA)
Ambarella Inc (AMBA) makes chips for one of the hottest markets right now. AMBA makes semiconductor chips that are used in high definition mobile video devices like the super popular GoPro Inc (GPRO) wearable cameras.
The growing demand for wearable cameras for police officers and security forces will also be a huge source of sales and profits growth for Ambarella. Analysts are expecting AMBA stock to earn 50 cents per share this quarter, almost doubling last year’s 26 cents per share. Analysts have also been raising their estimates for AMBA stock as Ambarella continually exceeds expectation.
Ambarella has posted four consecutive positive surprises as demand for sports and wearable cameras are stronger than anticipated. AMBA stock was upgraded to an A back in September and remains a “strong buy” at the current price.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.