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Semiconductor Watchlist: Cramer Eyes Nvidia as It Dominates the Sector

See buy or sell recommendations for AMD, Applied Materials, Qualcomm, NXP, Broadcom, Taiwan Semiconductor, and more semiconductor stocks.

Nvidia  (NVDA)  continues to outperform Advanced Micro Devices  (AMD) , as well as high-growth stocks. 

The latter has been stuck in a brutal bear market, while Nvidia’s superior financials and larger market cap have kept the stock out of trouble, TheStreet's Bret Kenwell wrote.

The Street's Jim Cramer discussed during The Morning Bell Monday how to trade Applied Materials and Nvidia. Cramer said Applied Materials  (AMAT)  had a good enough quarter and put out a good outlook for 2022.

"But a colleague said that the stock has run up so much already, how can there be more room?" Cramer said. "The answer to that is I don't know. They did give a 2022 outlook that was positive so you're going to have an up year next year. But I also understand the reluctance to buy it because it has moved up well in advance of the good news," he added.

Check out Eric Jhonsa’s live blog of Nvidia’s earnings on Wednesday after the close.

Bruce Kamich, TheStreet's in-house technical analyst, took a look at Nvidia ahead of the company's scheduled quarterly report Wednesday and writes that the charts show support for further gains. Read more of Kamich's analysis on Real Money.

Nvidia shares rose after the semiconductor maker declared a 4-for-1 stock split. If shareholders approve the plan, Nvidia holders of record June 21 will receive a dividend of three common shares for every share they hold.

But, Cramer said you don't buy a stock because of a split.

"Nothing fundamental has happened in the company," he said. "It's the same company even after the stock split. The fact that Nvidia's stock went up after the split just shows that there are too many individual investors involved who will eventually realize that I paid up for something that didn't really move the stock, but the stock could finish unchanged."

Earlier this month, Baird analyst Tristan Gerra initiated coverage of Nvidia with an outperform rating and an $800 price target. “Nvidia is poised to dominate [artificial intelligence] computing, the most transformational technology of our era,” he wrote in a commentary.

“Nvidia's data-center revenue has grown to nearly 30% of Intel's  (INTC)  platform revenue in just a few years,” the analyst said. The barriers to entry into Nvidia's businesses are “the highest and longest-lasting within the semiconductor industry,” Gerra added.

Cramer said he's watching the markets return to normal. "We've got semiconductor companies that are doing well, like Broadcom's  (AVGO)  deal with Google  (GOOGL)  and the stock jumps 18%," he said.

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 Tuesday, May 25:

Nvidia Corp | +11.18% 5-Day

Nvidia  (NVDA)  shares were higher on Monday, with Wall Street analysts expecting a strong earnings report during the worldwide semiconductor shortage. Shares of the Santa Clara, Calif., company at last check rose 4.3% to $625.41. 

Jim Cramer said he is currently watching Nvidia closely. "Ever since they announced that they would do a 4-for-1 stock split, the stock has been on fire. But, that's not why I want people to buy a stock, that's crazy, but it is within striking distance from its all-time high so I'm watching that," Cramer said. 

TheStreet Quant Ratings rates Nvidia as a Buy with a rating score of B.

Applied Materials | +15.93% 5-Day

Shares of Applied Materials  (AMAT)  rose Tuesday but wavered this past week after the semiconductor equipment major reported mixed fiscal-second-quarter earnings and received a number of positive reviews and price-target upgrades from Wall Street analysts.

Applied Materials gave a bullish forecast for the current quarter, boosted by orders from chipmakers, which are rushing to add capacity to meet a flood of demand for
their products.

TheStreet Quant Ratings rates Applied Materials as a Buy with a rating score of A-.

Qualcomm | +3.51% 5-Day

Shares of Qualcomm  (QCOM)  and other Apple  (AAPL)  suppliers were dropping this past week after a media report said Apple's 5G baseband chip could be used in the iPhone as soon as 2023.

AppleInsider cited TF International Securities analyst Ming-Chi Kuo as the person making its prediction. Kuo sees Qualcomm having to change its strategy to combat order losses from Apple.

Jim Cramer recently said investors should "own Qualcomm stock."

TheStreet Quant Ratings rates Qualcomm as a Buy with a rating score of B+.

NXP Semiconductors | +7.21% 5-Day

NXP Semiconductors  (NXPI)  swung to a stronger-than-expected first-quarter profit from a year-earlier loss on 27% higher revenue.

The Eindhoven, Netherlands, chipmaker reported that it earned $1.25 a share compared with a loss of 8 cents a share in the year-earlier quarter. Revenue reached $2.57 billion from $2.02 billion.

TheStreet Quant Ratings rates NXP Semiconductors as a Buy with a rating score of B.

Advanced Micro Devices | +4.24% 5-Day

Futures contracts tied to the Nasdaq Composite index are priced for a 75 point opening bell gain, thanks in part to pre-market advances for Apple, Tesla  (TSLA,)  and Advanced Micro Devices  (AMD) , while those linked to the S&P 500 are indicating a 13 point gain.

"AMD follows up with its strength yesterday on an incredible buyback by Lisa Su. I'm seeing tech with some good news and that's a very healthy sign," said Cramer. 

TheStreet Quant Ratings rates AMD as a Buy with a rating score of B.

Taiwan Semiconductor Manufacturing | +2.91% 5-Day

Cramer said this past week that if investors think chips are truly in short supply and we need capital equipment, then the company they most need is Lam Research  (LRCX) , other than Taiwan Semiconductor Manufacturing  (TSM) .

Cramer spoke recently about picking stocks against a broad worldview, and Taiwan Semiconductors was discussed.

"For me, I'm particularly concerned about the Chinese making a move on Taiwan. We're squeezing their critical companies to the de facto takeover of Taiwan Semiconductor. I don't want inflation to be so raging that Jay Powell can't engineer a soft landing," Cramer said.

TheStreet Quant Ratings rates TSM as a Buy with a rating score of A.

Micron Technology | +2.41% 5-Day

Micron Technology  (MU)  announced this past week the successful closing of nearly $3.7 billion inaugural sustainability-linked credit facilities.

The facilities, which create additional long-term value for Micron's stakeholders, reinforce the company's commitment to sustainability and 2030 environmental goals.

TheStreet Quant Ratings rates Micron as a Buy with a rating score of B.

Broadcom | +5.79% 5-Day

Broadcom  (AVGO)  this past week announced the availability of its Emulex Gen 7 LPe36000-series Host Bus Adapters (HBAs)— the world's first 64G Fibre Channel HBA. With the release of LPe36000-series, Broadcom becomes the first in the industry to provide a complete portfolio of products that enable an end-to-end 64G data path.

"This is a high-multiple stock that has people spooked. I own it for my charitable trust and you should, too." Cramer recently said of Broadcom during a Mad Money Lightning Round.

TheStreet Quant Ratings rates Broadcom as a Buy with a rating score of B.

Intel | +3.42% 5-Day

Intel  (INTC)  shares rose Tuesday but slumped lower this past week after the chipmaker recently hinted that investments in new manufacturing foundries would likely pressure near-term profit margins, clouding the impact of its first-quarter earnings beat.

Intel, despite what the company keeps saying, is nowhere, according to Cramer. "Yes, it bothers me right now that the stock is down a buck. Yes! It's killing me! And Intel keeps saying that they're going to pass AMD any minute. That's nonsense," Cramer said.

TheStreet Quant Ratings rates Intel as a Buy with a rating score of A-.

Texas Instruments | +5.20% 5-Day

Chipmaker Texas Instruments  (TXN)  reported first-quarter revenue and earnings that topped analyst estimates, as well as strong second-quarter guidance.

The company reported first-quarter revenue of $4.29 billion vs. the analyst consensus of $4.00 billion, while adjusted earnings came in at $1.87 per share versus consensus estimates for $1.58 per share. Operating income for the quarter was $1.94 billion vs. consensus estimates of $1.71 billion.

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.