Semiconductor stocks have underperformed so far this year. For instance, shares of Advanced Micro Devices (NASDAQ:AMD), Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC), and Lam Research (NASDAQ:LRCX) are down about 60%, 59%, 48%, and 54%, respectively, year-to-date. Despite this significant correction, these stocks could stay under pressure due to multiple headwinds, including the slowdown in demand and the U.S. government’s new regulations for exports to China.
Recently, Lam Research delivered better-than-expected September quarter results. Its revenues of $5.07 billion came ahead of the Street’s expectations of $4.9 billion. Further, its adjusted EPS of $10.42 surpassed analysts’ estimates of $9.57.
While its top and bottom lines exceeded estimates, Lam Research expects the new U.S. export restrictions to negatively impact its financials by $2-$2.5 billion in the calendar year 2023. Earlier, Nvidia stated that it could lose $400 million in sales due to the new restrictions.
Providing his outlook on the semiconductor sector, Susquehanna analyst Christopher Rolland said, “We downgraded the Semiconductor sector in April ’21 based on a combination of high valuation multiples and “over-ordering,” and while multiples have indeed corrected, we still wait for excess inventory to work through the system (PC/Handset/Consumer working now; Industrial/Auto/Broad-based still yet to come).”
While Rolland doesn’t see a valuation risk, inventory and growing macro headwinds remain a concern.
Bottom Line
While semiconductor stocks remain pressured, let’s see how they stack up on TipRanks’ valuable datasets. With the help of TipRanks’ Stock Comparison tool, here is a summary of how these stocks compare.
TipRanks’ data shows that Wall Street is cautiously optimistic about the prospects of AMD, NVDA, and LRCX stocks. These companies sport a Moderate Buy consensus rating on TipRanks. However, analysts remain sidelined on Intel stock, which has a Hold consensus rating.
Further, AMD, NVDA, and INTC stocks have a Neutral Smart Score on TipRanks, and their stocks are likely to perform in line with the broader market. On the contrary, Lam Research stock has an Outperform Smart Score of nine out of 10, while analysts’ average price target of $498.65 implies 51.1% upside potential.