- Intel Corporation (NASDAQ:INTC): Its Core i9-12900KS processor claims to be the “world’s fastest desktop processor.”
- Micron Technology (NASDAQ:MU): Solid net income growth of 118.12% in 2021
- Qorvo (NASDAQ:QRVO): Down nearly 17% in 2022 and is now very attractive
- Lam Research (NASDAQ:LRCX): The impressive free cash flow growth of 68.42% in 2021 is supportive of the stock price
Semiconductor stocks have taken a beating in 2022 with a risk-off sentiment and concerns about how aggressively the U.S. Federal Reserve will raise interest rates. The supply chain problems persist and the global chip shortage is still unsolved. However, at the same time, there is high demand for goods that depend on semiconductors, like cars and mobile phones.
The main U.S stock indexes have recently made a strong rebound, so it is important to invest in high-quality stocks that are attractive based on their valuation. As a reference, the Nasdaq Composite Index had a price-to-earnings (P/E) ratio of 33.35 as of Mar. 25. Additionally, the Information Technology Sector had median values of forward P/E GAAP of 26.34 and forward price-to-sales (P/S) of 3.29.
Here are four semiconductor stocks that are strong buys in the short-term. They all have strong fundamentals, are undervalued, and have strong long-term growth prospects:
| INTC | Intel Corporation | $52.43 |
| MU | Micron Technologies | $85.64 |
| QRVO | Qorvo | $131.34 |
| LRCX | Lam Research | $564.04 |
Semiconductor Stocks to Buy: Intel Corporation (INTC)
Intel has a P/E Ratio trailing twelve months (TTM) of 10.77 and is now flat in 2022. The forward dividend and yield of $1.46 and 2.79%, respectively, are attractive and so is its valuation. The forward P/E GAAP is 17.40 and the forward P/S is 2.81.
The expected three to five year earnings per share (EPS) is 7.5%. Intel has announced that its new Core i9-12900KS processor is a game-changer as it will be the fastest desktop processor in the world. This is a significant milestone that can boost sales, especially for desktop computer users that rely on speed and are fine with paying the relevant high price.
Micron Technology (MU)
Micron Technology has seen its shares having losses of nearly 110% in 2022.
In 2021, the firm reported an impressive net income growth of 118.12%. With a P/E Ratio (TTM) of 13.03, MU stock seems cheap. It has a forward P/E GAAP of 8.2 and a forward P/S of 2.79. It gets better as MU stock has also a price/earnings to growth (PEG) GAAP (TTM) of only 0.09, reflecting an undervalued stock.
The expected three to five year EPS growth of 24.2% is very promising, indicating a stock that offers both value and plenty of growth.
Semiconductor Stocks to Buy: Qorvo (QRVO)
Shares of Qorvo have losses of nearly 17% in 2022. QRVO stock has a PE Ratio (TTM) of 13.29 and on a forward valuation it has a forward P/E GAAP of 13.82 and a forward P/S of 3.09.
Sales growth in 2021 was nearly 24% and net income growth surged by 119.4%.
Qorvo is expected to have a three to five year EPS growth of 10.09%, which is both attractive and seems sustainable. The stock has a PEG GAAP (TTM) of 0.1, which is another strong indication of being undervalued.
Lam Research (LRCX)
This fourth semiconductor stock has losses of 22% in 2022. This represents an investment opportunity based on its valuation and strong fundamentals, like the nearly 69% growth of free cash flow in 2021.
The PE Ratio (TTM) of 17.53 is the first indication of a stock that is attractive compared to the broader Nasdaq Composite Index. LRCX stock has a P/E GAAP (FWD) of 17.52 and a forward P/S of 4.59. The latter may not seem that attractive compared to the median value of its sector, but on the other hand, the stock has a PEG GAAP (TTM) of only 0.3.
What about growth? LRCX stock offers more than just a very attractive valuation now. The expected three to five year EPS growth is very promising at 18.88%.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
