Nvidia(NASDAQ:NVDA), Marvell Technology(NASDAQ:MRVL) and Micron(NASDAQ:MU) are among the top semiconductor stocks for 2022 at UBS, as the investment firm favors companies that have exposure to artificial intelligence and edge computing.
Analyst Timothy Arcuri believes that Nvidia (NVDA) is likely to benefit as it builds more "stable" revenue sources around its GPU and software moats, while Marvell (MRVL) is capable of using its "broad portfolio" and 5 nanometer investments into a host of new applications and opportunities. UBS has a buy rating on Nvidia (NVDA).
Micron (MU), which reported third-quarter earnings on Monday that beat Wall Street expectations, is likely to benefit in 2022 as an increase in memory could "drive a re-rating as DRAM cycles are becoming more durable," UBS wrote. Arcuri has a buy rating on Micron (MU) shares.
Lam Research(NASDAQ:LRCX) is also likely to benefit in 2022, as UBS sees a "hockey stick"-like growth in NAND Wafer Fab Equipment and Teradyne(NASDAQ:TER)should benefit from the system-on-a-chip test market "is biased potentially much higher in '22 as it 'catches up' with front-end WFE."
Additionally, companies like Broadcom(NASDAQ:AVGO), Synopsys(NASDAQ:SNPS), Analog Devices(NASDAQ:ADI)and Intel(NASDAQ:INTC)are all likely to benefit for a variety of different reasons, with Broadcom (AVGO) offering cyclical downside protection. Synopsys (SNPS) has a strong digital position, while Analog Digital Devices (ADI) could benefit from cost synergies of the Maxim deal.
Intel (INTC), which has been beleaguered in recent years, is "starting to close the competitive gap in terms of product roadmap with Alder Lake and Sapphire Rapids, but the substantial [capital expenditure] and uncertain return associated with foundry efforts keep us on the sidelines," Arcuri wrote in a note to investors, rating shares neutral.
The picture for other major chipmakers like Advanced Micro Devices(NASDAQ:AMD)and Qualcomm(NASDAQ:QCOM)is more mixed, with Arcuri citing Intel's (INTC) ability to close the gap with AMD, while Qualcomm is tied to a "mmWave ramp that still seems a ways out."
Last week, Qualcomm (QCOM) was named Morgan Stanley's top semiconductor stock heading into 2022, as the company is likely to benefit from continued growth in the smartphone business, notably 5G, and the company's growing exposure to the automotive and Internet of Things business.