7 Semiconductor Stocks To Buy On Coronavirus Weakness

Semiconductor stocks were mixed on Wednesday after a rough week of trading as concerns have grown about the impact of the Wuhan coronavirus on the Chinese economy. But while the coronavirus scare is very real, a big earnings beat from Apple, Inc. (AAPL) suggests the underlying market for semiconductor companies remains strong.

This week, Bank of America analyst Vivek Arya said the coronavirus creates downside risk in the first quarter for semiconductor stocks, especially those exposed to a smartphone, auto and industrial end-markets. However, Arya says any near-term weakness could be a buying opportunity. Here are seven of his top semiconductor stock picks.

Intel Corporation (INTC)

Following a record fourth-quarter earnings report and impressive 2020 guidance earlier this month, Arya said Intel has a rare combination of catalysts ahead. Despite recent CPU production issues, Intel is still the market share leader and has size and scale advantages over smaller competitors.

In addition, the breadth of Intel’s portfolio provides a safety net for investors, and the fact that the stock is under-owned among active portfolio managers creates a buying opportunity, Arya said. Intel is Arya’s top cloud semiconductor stock pick for 2020.

Bank of America has a Buy rating and $75 price target for INTC stock.

NVIDIA Corporation (NVDA)

Nvidia is another top stock picks with exposure to the cloud computing theme.

Arya said Nvidia’s gaming business should get a boost from the upcoming next-generation consoles expected to hit shelves in time for the holiday season. He said Nvidia has a sustainable leadership position and double-digit revenue growth opportunity in gaming. In the data center business, Arya said Nvidia’s artificial intelligence and natural language processing exposure will continue to drive demand, while robotics, health care, and smart cities are potential upside catalyst. Nvidia is also a leader in autonomous vehicle innovation.

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