Chip shortages are only worsening in the auto sector, according to Jim Cramer, the founder of TheStreet. Cramer has been hyperfocused on the semiconductor sector as the chip shortage impacts the overall market.
This past week, President Joe Biden hosted a semiconductor summit at the White House to discuss the shortage impacting many industries, including the auto industry.
Cramer noted in a column for Real Money this past week, "there simply aren't enough machines being made to create more chips, even as they are working pretty much around the clock to do so."
"You think that the stocks of Applied Materials (AMAT) - Get Applied Materials Inc. Report, KLA Corporation (KLA) , and Lam Research (LRCX) - Get Lam Research Corporation Report would be this high otherwise?" he added.
Lam Research reported record fiscal third-quarter results that beat analyst estimates on Wednesday. The semiconductor equipment maker reported adjusted earnings of $7.49 on revenues of $3.85 billion for its quarter ending in March. Analysts polled by FactSet were expecting adjusted earnings of $6.62 per share on revenues of $3.72 billion.
“Semiconductors are reaching new heights of strategic relevance, and Lam’s differentiated ability to meet our customers’ scaling challenges positions us well amid a strong wafer fabrication spending environment," said Tim Archer, Lam Research’s President, and Chief Executive Officer, in a statement.
Earlier this past week, on TheStreet Live, Cramer said, "We can't have people laid off or out of work because of GM (GM) - Get General Motors Company Report and Ford's (F) - Get Ford Motor Company Report problems with a few chip companies. I hope that President Biden lobbies for all the chip companies to make the chips that we need. It's time."
For more in-depth coverage of the semiconductor sector including trading recommendations and investment strategies, follow Eric Jhonsa on Real Money.
Here is a list of the semiconductor stocks to watch and their performance by percentage change at the close of trading on Wednesday, Apr. 21:
Nvidia Corp | -0.46% 5-Day
Nvidia (NVDA) - Get NVIDIA Corporation Report shares were pressured Monday after Oliver Dowden, the U.K.'s secretary of state for digital, culture, media, and sport, said regulators were intervening in the semiconductor company's proposed acquisition of Arm Ltd.
The British government is looking at the Santa Clara, Calif., company's proposed $40 billion purchase of the British chip designer from Softbank Group SFTBY due to national security concerns
Nvidia shares at the last check were down 2.7% to $619.47, but the company has been on fire lately and has drawn the praise of analysts. For instance, Raymond James analysts recently raised their price target to $750 from $700 as they eye a rebound in enterprise spending and Nvidia’s new chip.
TheStreet Quant Ratings rates Nvidia as a Buy with a rating score of B.
Qualcomm | +0.51% 5-Day
Qualcomm was cut to neutral from positive and its price target was also reduced to $155 a share from $175.
The firm also said that shortages in the semiconductor industry could lead customers to accumulate inventory or double order, which could lead to over shipments that do not reflect true demand.
Qualcomm announced this past week that it will publish the financial results for its second-quarter fiscal 2021 on Wednesday, Apr. 28.
TheStreet Quant Ratings rates Qualcomm as a Buy with a rating score of B.
Nxp Semiconductors | +0.22% 5-Day
Nxp Semiconductors (NXPI) - Get NXP Semiconductors N.V. Report was downgraded to equal-weight from overweight by analysts at Morgan Stanley this past week. The investment firm raised its price target on the company to $213 a share from $190.
Nxp has outperformed broad-based suppliers by 115%, according to Morgan Stanley, and the S&P 500 by 160%, driven by its inclusion into the S&P index in March. That rise gives NXP less room to run higher.
TheStreet Quant Ratings rates NXP Semiconductors as a Buy with a rating score of B-.
Advanced Micro Devices | +3.23% 5-Day
The chipmaker's $35 billion deal to acquire Xilinx (XLNX) - Get Xilinx Inc. Report was been approved by shareholders of both chipmakers. Under the terms, AMD will pay 1.7234 shares for each Xilinx share.
TheStreet Quant Ratings rates AMD as a Buy with a rating score of B.
Intel | -1.24% 5-Day
Officials from Intel (INTC) - Get Intel Corporation Report, Microsoft (MSFT) - Get Microsoft Corporation Report, Alphabet (GOOGL) - Get Alphabet Inc. Report, and General Motors (GM) - Get General Motors Company Report met with the White House earlier this month to discuss the impact a global semiconductor shortage is having on U.S. manufacturers.
Last month, Intel said it would build two new chip factories in Arizona, as the once-dominant chipmaker tries to regain momentum and favor in the U.S.
The company plans to evolve into both a designer and manufacturer and next-generation computer and smartphone chips while also developing a new business -- thanks in part to a development partnership with IBM (IBM) - Get International Business Machines Corporation Report -- that allows other companies to use its Arizona hub to make their own semiconductors.
TheStreet Quant Ratings rates Intel as a Buy with a rating score of A-.
Taiwan Semiconductor Manufacturing | -3.43% 5-Day
Taiwan Semiconductor Manufacturing (TSM) - Get Taiwan Semiconductor Manufacturing Company Ltd. Report boosted its near-term investment plans on Mar. 31, pledging to spend $100 billion over the next three years to increase production capacity, including a previously-announced factory it will build in Arizona.
The company boosted how much it will spend on CAPEX from $28 billion to $30 billion.
"You're in good shape there. I would buy it at these levels," Jim Cramer said of the company this past week.
TheStreet Quant Ratings rates TSM as a Buy with a rating score of A.
Broadcom | -4.32% 5-Day
Cramer said Wednesday that he's worried because some typically stable stocks such as Disney (DIS) - Get The Walt Disney Company Report, Alphabet (GOOGL) - Get Alphabet Inc. Report, and Broadcom (AVGO) - Get Broadcom Inc. Report are down. "We need those to reverse," he said.
Analysts at Deutsche Bank initiated coverage of the cybersecurity company CrowdStrike (CRWD) - Get CrowdStrike Holdings Inc. Report with a buy rating and $265 price target. The firm expects CrowdStrike to continue to land big-name new clients like Broadcom.
TheStreet Quant Ratings rates Broadcom as a Buy with a rating score of A-.
Micron Technology | -1.86% 5-Day
Micron Technology (MU) - Get Micron Technology Inc. Report reported fiscal-second-quarter revenue and adjusted earnings that exceeded Wall Street estimates. The company's adjusted earnings more than doubled to 98 cents a share from 45 cents a share in the year-earlier period.
TheStreet Quant Ratings rates Micron as a Buy with a rating score of B.
Texas Instruments | -1.37% 5-Day
Rafael Lizardi, senior vice president, and chief financial officer, and Dave Pahl, vice president and head of Investor Relations, will discuss TI's financial results and answer questions from the investor audience.
TheStreet Quant Ratings rates Texas Instruments as a Buy with a rating score of A.
AMD, Broadcom, and Nvidia are key holdings in Jim Cramer's Action Alerts PLUS charitable trust. Want to be alerted before Jim Cramer buys or sells any stock? Learn more from Cramer and his membership team now.: