Veteran semiconductor securities analyst Hans Mosesmann, who joined Rosenblatt Securities this month, initiated coverage on a range of chip stocks Wednesday. He slapped Intel (INTC) with a sell rating and gave buy ratings to three stocks on the IBD 50 list of top-performing growth stocks.
The IBD 50 currently lists 10 chip industry stocks, including Broadcom (AVGO), Microchip Technology (MCHP) and Nvidia (NVDA), all of which Mosesmann recommends.
"We are initiating coverage of the semiconductor sector today with a positive bias in an industry that is seeing moderating growth (mid-single digits), continued consolidation, and a slowing of Moore's Law," Mosesmann said in his research report.
Key disruptive themes to watch include artificial intelligence (machine learning, deep learning and self-driving cars), cloud computing and data center growth, the emergence of compute-centric graphics processing units, and multiple bandwidth transitions including optical, he said.
IBD'S TAKE: Nvidia stock has a best-possible IBD Composite Rating of 99 and is ranked No. 1 on the IBD 50 list of superior growth stocks.
In computing, Mosesmann favors the prospects of Nvidia and Advanced Micro Devices (AMD) as the top GPU players in the market. Nvidia's investments in artificial intelligence and parallel computing give it an edge in markets like autonomous driving, he said. AMD has the opportunity to gain market share in x86 servers with its Zen processor portfolio, he said.
He rates both stocks as buy with price targets of 140 for Nvidia and 16.50 for AMD.
Nvidia stock slipped a fraction to 110.76 on the stock market today. But AMD stock rose 2% to 14.28, hitting its highest price since October 2007.
Mosesmann said he is "skeptical" about Intel's prospects in computing, hence the sell rating. Intel fell 1.2% to 36.07 Wednesday.
He rates Broadcom, Microchip and Texas Instruments (TXN) as buy because they are diversified, free-cash-flow-focused companies. He set price targets of 250 on Broadcom, 90 on Microchip and Texas Instruments.
Broadcom stock rose 0.66% to 214.16, hitting an all-time high for the third straight trading day. Microchip rose 0.77% to 73.04. TI stock rose 15 cents to 77.23.
He also set buy ratings on memory chipmaker Micron Technology (MU) and optical components firm Inphi (IPHI). He gave price targets of 34 to Micron and 60 on Inphi.
Micron stock slipped 2 cents to 23.75 Wednesday, while Inphi fell 0.72% to 51.03.
Mosesmann rates as neutral Cavium (CAVM), Mellanox Technologies (MLNX) and Xilinx (XLNX) based on valuation.
RELATED:
