|Bid||0.00 x 1400|
|Ask||0.00 x 900|
|Day's Range||123.91 - 128.01|
|52 Week Range||66.35 - 141.60|
|Beta (3Y Monthly)||1.46|
|PE Ratio (TTM)||36.68|
|Earnings Date||Jul 24, 2019|
|Forward Dividend & Yield||1.48 (1.19%)|
|1y Target Est||127.66|
Chipmaker Nvidia is at the forefront of AI and machine learning, but earnings and share prices have dived. Here is what fundamental and technical analysis say about buying Nvidia stock now.
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Growth in the communications market and a rebound in the non-communications space are likely to safeguard Xilinx's (XLNX) first-quarter fiscal 2020 results.
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Chip stocks face numerous challenges right now. Fundamentally speaking, markets continue to weaken due to the ongoing U.S./China trade war, while channel inventories remain elevated. Further headwinds arise from the US government's Huawei restrictions and weak 2H19 iPhone builds (down 15% year-over-year) aren't helping either. Luckily, top-rated KeyBanc analyst John Vinh has just released a valuable report setting out his chip expectations going into second quarter earnings. And he selects two chip stocks that still offer a compelling outlook for investors. However the analyst does caution “Huawei expectations are likely to be a source of confusion, as it remains unclear as to which suppliers have stopped or resumed shipments given different interpretations of the entity list rules.” With this warning in mind, let’s take a closer look at the two buy-rated stocks now: Broadcom Inc (AVGO)The number one chip stock for Vinh is semiconductor giant Broadcom. Vinh sees positive risk/reward for AVGO right now thanks to a slew of encouraging reasons. Most notably, the company’s current guidance excludes contributions from Huawei. As a result the analyst believes the easing of trade restrictions and possibility Broadcom has already begun shipping will allow the company to reiterate full -year guidance. At the same time, Vinh singles out M&A as a defensive mechanism in the current downturn. That’s because accretive cost synergies should limit downside risk to EPS. “While the acquisition of another software company is unlikely to result in multiple expansion, outsized earnings growth is likely to lead to stock outperformance assuming the current valuation multiple remains constant” explains the analyst on July 16. For example, the company was recently in talks to buy out cybersecurity stock Symantec (SYMC), although the deal has now reportedly stalled over price disagreements. Nonetheless, as Stacy Rasgon, an analyst with Bernstein commented: “Broadcom buys software companies, that’s their strategy. If this falls apart, they’ll buy something else at some point.” Putting this altogether, Vinh expect AVGO to post in line F3 Q19 (Jul) results and reiterate full -year guidance. (Note that Broadcom reports results off quarter, which means that its next earnings are for the fiscal third quarter.) The analyst’s current $310 price target indicates 9% upside from the stock’s $284 price target. Even though the stock has faltered in the last three months, shares still are up 12% year-to-date. That’s with an impressive 1-year change of 40%. Adding weight to his call is the fact that we can see Vinh has a strong 88% success rate return when it comes to his AVGO ratings. That’s with an average return per Broadcom rating of 31.8%. Encouragingly, the Street shares this bullish approach. The stock holds a Strong Buy analyst consensus, and a $312 average price target (10% upside potential). In fact, out of 27 analysts polled on the stock in the last three months, 21 rate the stock a buy and only 6 rate the stock a hold. Xilinx, Inc. (XLNX)Also on Vinh’s ‘buy’ list is Xilinx, a supplier of programmable logic devices. The stock has surged since June when the company revealed that its seven nanometer (nm) Versal adaptive compute acceleration program (ACAP) chips had already begun shipping to customers.“We believe current estimates are achievable given 5G rollouts exChina and the anticipated recovery in AIT (A&D, Industrial, TME). We anticipate in-line F1Q20 (June) results and in-line to higher F2Q20 (Sept.) guidance” writes Vinh. The company is set to report June quarter earnings on Wednesday, July 24th, after the market close. The analyst adds: “We believe expectations for XLNX have already been largely been derisked, when the Company previously lowered its outlook for WWG (Wired and Wireless Group) to 12.5% growth in FY20 (March).” He has a $130 price target on the stock- which is exactly in line with the Street’s average price target. Meanwhile Vinh’s track record on Xilinx works out slightly under his AVGO record- but the success rate is still an impressive 76% with a 24.4% average return per rating. Overall, the Street shows a cautiously optimistic outlook for Xilinx stock. The stock has a Moderate Buy consensus with analysts equally split between hold and buy. Right now, the most bullish analyst on the stock is Hans Mosesmann of Rosenblatt Securities. He recently ramped up his price target to $165, indicating 37% upside potential.“Even with Huawei not expected to be a major customer for Xilinx in the future, we believe management will continue to support a 5-year mid-teens sales and earnings growth profile driven by data center acceleration, 5G broad-based exposure outside of Huawei, and industrial/ automotive traction enabled by an aggressive 7nm process technology ramp” explains Mosesmann.
Xilinx (XLNX) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
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Xilinx Inc NASDAQ/NGS:XLNXView full report here! Summary * Bearish sentiment is low * Economic output for the sector is expanding but at a slower rate Bearish sentimentShort interest | PositiveShort interest is low for XLNX with fewer than 5% of shares on loan. The last change in the short interest score occurred more than 1 month ago and implies that there has been little change in sentiment among investors who seek to profit from falling equity prices. Money flowETF/Index ownership | NeutralETF activity is neutral. The net inflows of $7.82 billion over the last one-month into ETFs that hold XLNX are not among the highest of the last year and have been slowing. Economic sentimentPMI by IHS Markit | NegativeAccording to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Technology sector is rising. The rate of growth is very weak relative to the trend shown over the past year, and has continued to ease. However, the rate of expansion may accelerate in the coming months. Credit worthinessCredit default swapCDS data is not available for this security.Please send all inquiries related to the report to email@example.com.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
As analysts wonder whether the chip slump is over, Nvidia (NASDAQ:NVDA) is engaged in a highly-publicized fight with Advanced Micro Devices (NASDAQ:AMD) over the gaming market.Source: Shutterstock Is the new AMD chipset as good as Nvidia's GeForce graphics cards? Are the new Nvidia boards much better for gamers at all?All this is of great interest to gamers like my son, who asked all weekend whether he should plunk for a new graphics engine on his 3-year-old PC. It may even stimulate near-term volatility and profits for short sellers.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut if you're a long-term investor and see strength 10 years ahead of you instead of infirmity, this is not where the game is. The game for you is artificial intelligence. It's in the clouds and new devices we can barely imagine today. * 7 A-Rated Stocks to Buy for the Rest of 2019 That's the game Nvidia aims to win. The AI GameNvidia has been focused on the cloud market in recent years, specifically in general purpose chips that accelerate the work of clouds. They dominates that market the way Intel (NASDAQ:INTC) once dominated PCs.Rivals are hiding in niches, trying to turn what had been field-programmable gate arrays (FGPAs) into competition for general purpose Nvidia chips. Xilinx (NASDAQ:XLNX), Intel and AMD are all doing similar things. But Nvidia still has the most complete solution for cloud-based artificial intelligence (AI). That will become more apparent once its acquisition of Mellanox (NASDAQ:MLNX), whose "networking fabric" delivers optical speeds within data centers, is complete.Nvidia's recent construction of its own AI computer, dubbed the SuperPod, demonstrated just how big its data center ambitions are.Nvidia's competition won't come from other chipmakers but from the cloud giants themselves. Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) are all working on AI chip sets for their clouds, knowing that keeping costs down on scaled infrastructure is still their key to success.To win them over Nvidia is demonstrating inference chips with 32 "chiplet" processors, while commercial chips are running with four or eight processors. Nvidia's processor is like a cloud on a chip.None of this is cheap. Nvidia's research budget last year came to nearly $2.4 billion, one-third more than the previous year. That's twice as much as it spends on selling and general administration, over one-third of total operating spending. But if it keeps Nvidia ahead of its customers, it's money well-spent. NVDA Has Much to WinThere's a common misperception among investors that everything falls in a recession.It's not true. Throughout this century technology has recovered ahead of the general economy. Technology that can cut costs, not just create new markets, has done especially well.That's where Nvidia expects to win. Replacing labor, even intellectual labor, with machines boosts productivity once customers realize they must either innovate or die. It eliminated middle managers in the 2000s, insurance salesmen in the 2010s, and is bound to eliminate millions of drivers and machine operators in the next decade.What will be left will be the value those jobs provided. Deliveries will still reach you, just as you can still buy insurance and run a scaled enterprise. A recession that other companies anticipate with dread, Nvidia approaches with hope. The Bottom Line for Nvidia StockNvidia's 0.39% dividend yield is not the reason you buy the stock. Income investors should look elsewhere.Nvidia's short-term growth prospects are also poor. It brought in $2.22 billion during the first quarter of its 2020 fiscal year. It's expected to bring in just $2.55 billion this quarter, which will be reported August 15. At its current pace, it will be tough to match last year's $11.7 billion.You buy Nvidia with your eyes on the horizon -- three years, five years, 10 years out. CEO Jensen Huang is 56. He should be around for the next decade.He's a name worth betting on.Dana Blankenhorn is a financial and technology journalist. He is the author of a new environmental story, Bridget O'Flynn and the Bear, available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN and MSFT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 A-Rated Stocks to Buy for the Rest of 2019 * 7 Education Stocks to Buy for the Future of Academia * 5 Stocks to Buy as You Rebalance Your Portfolio The post Nvidia Stock: Itas Not All in the Game appeared first on InvestorPlace.
Finding top semiconductor stocks to buy involves understanding the health of markets that purchase chips for their products. Chip stocks have risen ahead of second-quarter earnings reports.
Chip-related stocks lead the broader tech sector higher following a truce in the trade war with China, which threatens to drag heavily on suppliers of semiconductors.
NVIDIA (NVDA) is a leader in the cloud AI GPU (graphics processing unit) market. The first half has been weak for NVIDIA as demand from cloud companies has slowed. NVIDIA noted that data center customers have been absorbing their excess inventory, which has slowed their purchases.
President Trump & China's president Xi met at the G20 summit in Japan this weekend and agreed to restart talks after a 7-week breakdown. Mercatus Center Senior Research Fellow Daniel Griswold and The Independent Institute's Ivan Eland join Yahoo Finance's Zack Guzman on "YFi PM" to discuss.