Introduction

NXP Semiconductors (NXPI) and Intel Corp. (INTC) are constituents in our Integrated Device Manufacturers (IDM) Portfolio, and they both surged during the week ending August 15th:

What is the Integrated Device Manufacturers Semiconductor Sector?

Our Integrated Device Manufacturers (IDM) Portfolio is one of 6 sub-segments in the AI hardware (semiconductor/computer chip/wafer) segment. It focuses on companies that do everything themselves in house to control the entire semiconductor production process. 

Below are the key drivers behind Intel's and NXP's increases:

Why INTC Surged Last Week

Intel has struggled with cash flow and delays in its $100 billion chip manufacturing complex in Ohio so the Trump administration announced last week that it is considering having the U.S. government take a direct stake in Intel via the CHIPS Act which would be a lifeline for the company hence the surge in consumer and analyst confidence in Intel's future.

Why NXPI Advanced Last Week

1. Sector Momentum: As mentioned above, the semiconductor sector was up 2.2% last week and this broader rally likely lifted NXPI along with its peers.
2. Share Buyback Program: NXP repurchased 1.1 million shares which have the affect of reducing supply and boosting earnings per share, which can drive stock prices higher. 
3. Analyst Upgrades: The 20 analysts that cover NXP Semiconductors stock have a consensus rating of "Strong Buy" and an average price target of $250.30 (source), which forecasts a 9.41% increase in the stock price over the next year. The lowest target is $190 and the highest is $300.
4. Apple Investment News: Apple’s announcement of a $100 billion U.S. investment may have indirectly benefited NXPI, given its role in supplying chips for consumer electronics and automotive applications.

The Integrated Device Manufacturers (IDM) Portfolio

All 8 constituents in the IDM  portfolio advanced last week and are all up so far in  August except Microchip Technology (see why that is the case in last week's article on Microchip here). Below are their week's performances, in descending order:

1. Intel Corp. (INTC): up 23.1%:
2. NXP Semiconductors (NXPI): up 10.4%
3. Microchip Technology (MCHP): up 6.2%
4. Texas Instruments (TXN): up 3.9%
5. Infineon Technologies (IFNNY): up 3.5%
6. Analog Devices (ADI): up 3.4%
7. STMicroelectronics (STM): up 2.4%
8. Micron Technology (MU): up 1.7%

Summary

The Integrated Device Manufacturers (IDM) Portfolio was up 5.5% w/e August 15th and is now up 6.1% MTD and 13.0% YTD.

Go HERE to create a chart of the portfolio's performance

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