2 Chip Stocks Analysts are Buying

NXPI struggled alongside the broader tech sector in late 2018

Jan 17, 2019 at 11:29 AM
facebook twitter linkedin


Nomura Instinet upgraded NXP Semiconductors NV (NASDAQ:NXPI) to "buy" from "neutral," and maintained its $95 price target -- a 21.3% premium to last night's close at $78.34. The analyst in coverage said valuation is appealing after the chip stock's recent sell-off, and traders are "underappreciating an attractive end-market mix." Likewise, CrispIdea Research reiterated its "buy" rating and $88.90 NXPI price target.

Nevertheless, NXP Semiconductors stock is trading down 0.1% at $78.23. The shares longer-term trend has been lower, too, with the equity down roughly 34%. Plus, NXPI's rebound off its late-December two-year low of $67.62 has struggled against its 80-day moving average -- a trendline that's ushered the shares lower since June.

Against this backdrop, short sellers have increased their exposure to NXPI stock. Short interest is up 37% since mid-October to 17.60 million shares -- the most since late 2015. This represents 7% of the equity's available float, or 3.9 times the average daily pace of trading.

 Xilinx, Inc. (NASDAQ:XLNX) was upgraded to "buy" from "neutral" at Mizuho Securities, which also raised its price target to $100 from $77 -- a 10.5% premium to Wednesday's close at $90.49. The brokerage firm waxed optimistic on the California-based semiconductor firm's exposure to 5G, which could create tailwinds for XLNX, versus "anemic growth in other verticals and peers."

XLNX stock is trading up 0.8% today at $91.17, edging closer to its Dec. 3 18-year high of $95.18. The shares retreated after hitting this milestone, but found a familiar foothold at their 80-day trendline. The equity bounced sharply from here on Dec. 26, and have added 7% already in 2018.

A number of analysts are still on the sidelines when it comes to XLNX, though, with half still maintaining a "hold" or "strong sell" at last night's close. Plus, the average 12-month price target of $89.50 is a discount to current trading levels. This leaves the door open for more upward revisions, which could create tailwinds for the tech shares.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners