Morgan Stanley: 5 A I. chip stocks that could take Nvidia’s market share

That’s why comprehension of how blue chip stocks work is one of the key skills a prosperous investor should possess to stay at the forefront of finance. To that end, the company has been “a serial acquirer,” notes Morozov, and is skilled at quickly integrating its acquisitions to extract meaningful synergies. Pfizer stock offers the highest trailing yield among our list of the best blue-chip stocks to buy for the long term.

• While semiconductor sales reached an all-time high in 2022, a downturn in the second half of the year significantly limited growth.
• Use these strategies to help your business shift from looking for new clients to having new clients look for you.
• Its trailing-12-month levered FCF margin of 17.94% is 163.4% higher than the 6.81`% industry average.
• The list should be diversified and include stocks you might want to buy.
• A good benchmark is the nominal GDP growth rate of the company’s primary markets.

Investors turn to the company for its growth potential, which is something unusual in blue chip stocks of this size. Perhaps you’ve noticed this blue chip’s stock price sailing to all-time highs despite the short-term setback. Much like a strong investment portfolio, it has diversified its business across several different areas. Investing in blue-chip stocks is a great way to build a portfolio. However, not all blue-chip stocks are suitable for all investors at all times. Build a watchlist of blue-chip stocks first, then pick the right ones and buy them when they present the best opportunities.

For Business

And when investors turn to the financial press, they find that analysts and advisors will offer different opinions. The truth is that over the years, there’s a case to be made for both. Blue chip stocks are aptly named because they’re issued by the best companies in an industry/sector and usually have rock-solid financials and enviable valuations.

The analysts are pretty bullish on this stock; out of 16 who followed it in May, five rated it a strong buy and eight rated it a buy. It’s expected to reach a price of $72.29 in 12 months, per average analyst estimates. Conglomerate Honeywell International is exposed to many different sectors and tends to closely track the performance of the wider market. A five year beta of 0.39 sums up the company’s steady attributes. The stock is currently trading close to its all-time high, despite seeing only a small rise year-to-date. In the company’s April 2023 Q1 results, PG revealed that, although it has seen rising input costs, it nonetheless boosted profit margins for the first time in more than two years.

Advanced Micro Devices

SITM demonstrated significant momentum during 2021, with revenue doubling from $36 million in the first quarter of the year to $76 million in the fourth quarter. Although revenue growth has been relatively flat this year, SiTime was able to maintain its revenue above $70 million in three of the four quarters of 2022 (Q4 revenue https://g-markets.net/helpful-articles/how-to-identify-supply-and-demand-zones/ came in at $60.8 million). Nvidia has solid fundamentals and arguably remains the best AI stock among semis, but it isn’t out of the woods yet. Its rising inventory levels, now at $5.2 billion – double the year-ago figure due to weakening demand for its graphics processing units – can present a problem in the future.

From compact personal computers to giant data servers, companies from the semiconductor industry have had a major impact on individual consumers and multinational corporations. This presents a unique opportunity for you to choose a technology company that aligns with your stock portfolio. Information technology is at the forefront of digital transformation.

What it lacks in high-octane growth, it more than makes up for in profitability. The company generated a whopping free cash flow profit margin of almost 49% in 2022. Longer-term, global chip sales are expected to surpass $1 trillion by the end of this decade. Demand is soaring as developments in everything from household appliances to autos to data centers increase the need for various microchips and electronic components. The STI outperformed all global stock benchmarks in total returns generated (inclusive of dividends and in US Dollars. Blue-chip stocks may decline in value or remain flat during a period when small-cap stocks, stocks of foreign companies, or bonds are rising.

Chip Stocks & Semiconductor Industry News And Analysis

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The semiconductor industry is notoriously volatile, and not all investors can stomach the ups and downs in the sector. However, the CHIPS Act should provide a continuing boost to the sector, and the long-term outlook, according to most analysts, is positive, as semiconductors have become integrated into almost everything. Despite the bargain stats, Amkor still delivers the goods operationally.

Computers, smartphones and smart TVs have become household items for millions of people around the world, and companies that design and develop semiconductors are the key catalysts driving that change. You can cash in on these new waves of innovation by investing in semiconductor stocks today. Qualcomm develops and licenses wireless technology and designs chips for smartphones. The company’s key patents revolve around CDMA and OFDMA technologies, which are standards in wireless communications that are the backbone of all 3G and 4G networks. Qualcomm’s IP is licensed by virtually all wireless device makers.

Profitability and dividend yields for some blue chips, such as, for example, Vodafone or Shell, are sometimes near historical highest values. High dividend yields vary in percentage, but some of them can offer a solid figure of around 15%. A blue chip stock is a large, financially-sound, nationally-recognized and well-established business that trades on public markets. Blue chip companies usually sell high-quality and broadly-used products and services. They are known for their long-term track records of stable and reliable growth, helping them operate profitably regardless of current economic conditions. Blue-chip stocks are a common component of many investors’ portfolios, no matter the investor’s age or investment style.

What Is an Example of a Blue Chip Company?

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Blue-chip stocks tend to pay reliable dividends, which can be expected from companies that are captains of their respective fields. A Barron’s screen identified the least expensive 15 stocks in the chip index in terms of their prices relative to forecast 2022 earnings. As always with stock screens, the list offers a good place to start research, and isn’t a recommendation to buy or sell a particular name or basket of stocks. In contrast, if a company is growing more quickly than the rate of GDP growth, it’s a sign that the company’s industry is becoming more relevant, or that the company is taking market share from its competitors.

Is it good to invest in semiconductor stock?

Needless to say, investing in a few blue-chip stocks is still a wise choice, as their reliability makes them nearly immune to market downturns. Lincoln National Corporation offers life insurance, annuities, retirement plan services and group protection. The corporation was founded in 1905 as The Lincoln National Life Insurance Company. Permission from Abraham Lincoln’s son to use the former president’s name was granted. In 1969, Lincoln National Corp begins trading on the New York Stock Exchange and the Midwest Stock Exchange. Qualcomm weathered last year’s storm and is up 4.77% so far this year.

• Some examples include Microsoft, Apple, Coca-Cola, Chevron, and Boeing Corp.
• With that said, blue-chip stocks deserve a place in every portfolio.
• If Singtel is able to deliver a decent dividend yield in the near term, it will continue to be a good blue chip stock against the backdrop of market turbulence in the foreseeable future.
• The company has remained true to its roots, and some one-third of its revenue still comes from its video game segment, a ubiquitous form of entertainment around the world.

In February 2020, KLA announced the Archer™ 750 imaging-based overlay metrology system and the SpectraShape™ 11k optical critical dimension metrology system for integrated circuit (IC) manufacturing. Street expects its revenue to increase by 2.9% year-over-year to $892.50 million in 2024. Its EPS is expected to grow by 19.4% year-over-year to $1.97 in 2024.

Over time, you can build a large portfolio of dividend-paying blue-chip stocks to sustain a comfortable retirement. The list should be diversified and include stocks you might want to buy. You can put together a watchlist of stocks on many stock news sites, including on MarketBeat. The purpose of the watchlist is to develop a list of the stocks you want to build positions in and then keep track of them, waiting for opportune entry points.

This pricing power has led to strong cash flow, with shareholders benefitting through consistent dividends. In April, it announced its 61st consecutive increase to the quarterly dividend. 89 hedge funds were long on the company’s stock at the end of the third quarter, according to Insider Monkey’s database. Fisher Asset Management had the biggest long position in the company at the end of Q3 2022.

Blue-chip stocks: pros and cons

Their growth is consistent over time and the prognostications are equally good. They lack the sizzle and pop of sky-rocketing start-ups, but that’s only because they’re the big kids on the block. This site provides equity research and investment strategies to give you the insight and data you need for managing your money through all market conditions.