On Friday, Piper Sandler provided insights into the semiconductor sector, drawing on recent meetings with management teams at the Consumer Electronics Show (CES) in Las Vegas.
The firm highlighted Nvidia Corporation (NASDAQ:NVDA) stock as the best positioned to benefit from growth in AI, autonomous driving, and physical AI due to its advanced chip technology. Nvidia's Blackwell chip, touted as the most complex to date, is expected to set a trend for future architectures in accelerated computing.
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Micron Technology, Inc. (NASDAQ:MU) also received positive remarks for its strategy around High Bandwidth (NASDAQ:BAND) Memory (HBM) and the expanding total addressable market (TAM) for its data center business.
Meanwhile, Qualcomm Inc . (NASDAQ:QCOM), currently trading at $159.08 with a market cap of $176.74B, is anticipated to maintain steady handset unit sales through 2025, with better average selling prices and product mix providing tailwinds for the company.
InvestingPro analysis shows Qualcomm maintains a GOOD financial health score and has raised its dividend for 22 consecutive years, demonstrating consistent shareholder returns alongside its growth strategy.
Skyworks Solutions, Inc. (NASDAQ:SWKS) is doubling its research and development spending to support multiple modem projects, which may affect the company's financial outlook. Analog Devices , Inc. (NASDAQ:ADI) faces persistent headwinds in the automotive and industrial sectors, although some positive developments in China's auto market were noted.
ON Semiconductor Corporation (NASDAQ:ON) reported a very slow macro recovery with declining turn orders in the past 30 days, indicating sluggish near-term demand. Piper Sandler's analysis suggests caution for ON's immediate prospects.
Overall, the firm's commentary underscores a mixed outlook for the semiconductor sector, with certain companies like Nvidia and Micron poised for growth, while others navigate ongoing challenges.
In other recent news, Qualcomm has seen substantial activity.
The company recently reported non-GAAP revenues of $10.2 billion and earnings per share of $2.69, with the chipset segment contributing $8.7 billion in revenues and the licensing segment bringing in $1.5 billion. Analysts from Mizuho (NYSE:MFG) Securities and KeyBanc have maintained an Outperform and Sector Weight rating on Qualcomm, respectively.
Qualcomm also emerged victorious in a legal dispute with Arm Holdings (NASDAQ:ARM), a significant event given the reliance of major tech firms on Arm's chip architecture. The jury confirmed that Qualcomm's integration of technology from its $1.4 billion acquisition of Nuvia Inc. in 2021 did not require additional licensing fees.
In addition, Qualcomm announced a leadership transition, with the retirement of Chief Technology Officer Dr. James H. Thompson and the appointment of Dr. Baaziz Achour as the new CTO. These are the latest developments in the company's ongoing efforts to maintain growth and offset any significant headwinds.
Qualcomm is also targeting the PC market with its system on chips (SoCs) that are priced between $100 and $250, showing a 10% price increase compared to the previous generation. The company is optimistic about its prospects in the extended reality (XR) market, as AI use cases continue to grow, potentially outpacing its current expectations and leading to a revenue target for the fiscal year 2029 that exceeds the initial $2 billion estimate.
Lastly, a high-stakes trial between Arm Ltd and Qualcomm commenced, centered around Qualcomm's use of Arm's intellectual property and Qualcomm's acquisition of Nuvia. The outcome could impact the future of artificial intelligence computing.
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