Latest news with #chipmakers
Yahoo
5 hours ago
- Business
- Yahoo
Undervalued and Profitable: 2 Artificial Intelligence (AI) Stocks for Long-Term Portfolios
These companies supply critical components required in AI data centers and chips. These chipmakers are growing fast, and their remarkably cheap valuations make them worth buying right now. Both companies should keep growing at healthy rates long term, thanks to the AI-focused markets they serve. 10 stocks we like better than Micron Technology › A tried and tested way of making money in the stock market is by buying great companies that are tapping into a growing trend that also trade at attractive valuations and holding them for the long run. This strategy allows investors to benefit from secular growth opportunities and disruptive trends, as well as take advantage of the power of compounding. Artificial intelligence (AI) is turning out to be one such secular and disruptive trend that has the ability to supercharge the growth of many companies in the long run because of its ability to contribute trillions of dollars to the global economy. There are two companies benefiting big-time from the proliferation of AI. They also happen to be profitable and undervalued when we consider their impressive growth rates. They are Marvell Technology (NASDAQ: MRVL) and Micron Technology (NASDAQ: MU). Let's see why buying and holding these two names for the long run could turn out to be a smart move. AI has brought about a major turnaround in Marvell Technology's fortunes. The company, which manufactures application-specific integrated circuits (ASICs) and networking chips, finished fiscal 2025 (which ended on Feb. 1) with revenue growth of just 5% to $5.77 billion. Its generally accepted accounting principles (GAAP) net loss for the year stood at $1.02 per share. The company's tepid performance last year was the result of weakness in multiple end markets such as enterprise networking, carrier infrastructure, and consumer devices. However, the story has changed remarkably in the first quarter of fiscal 2026. Marvell's revenue for fiscal Q1 (which ended on May 3) shot up a remarkable 63% year over year to $1.89 billion. The company reported a GAAP net income of $0.20 per share as compared to a loss of $0.25 per share in the year-ago period. AI played a central role in driving this terrific turnaround as the demand for Marvell's custom AI processors increased dramatically, leading to a 76% year-over-year increase in its data center revenue to $1.44 billion. CEO Matt Murphy remarked on Marvell's May earnings conference call, "These strong results, along with our second-quarter guidance, are being driven by the rapid scaling of our custom AI silicon programs to high-volume production, along with robust shipments of our electro-optics products for AI and cloud applications." Importantly, Marvell expects its robust data center momentum to continue in the current and the next fiscal year, as well as in the long run. The company points out that it is deeply engaged with its AI customers for developing custom chips, and the good part is that they are working with Marvell to develop the next generation of custom AI processors as well. This explains why the company is confident it can sustain its AI-powered growth in the long run. Moreover, Marvell's focus on pushing the envelope on the product development front is expected to help it land a bigger share of the fast-growing custom AI processor market. The company pointed out last year that its AI-focused addressable market could grow to $75 billion in 2028 from $21 billion in 2023. It controlled 10% of this market at the end of 2023, according to its own estimates. However, third-party estimates suggest that Marvell's share of custom AI chips increased to 15% last year. Looking ahead, the company is aiming to capture more than 20% of this market. That could bring its AI revenue to more than $7.5 billion in the next three fiscal years (based on the $75 billion end-market estimate), which would be a major improvement over its fiscal 2025 AI revenue of over $1.5 billion. So, AI is set to move the needle in a big way for Marvell Technology going forward, allowing it to maintain healthy earnings growth levels. Marvell stock trades at just 22 times earnings right now. It makes sense to buy this semiconductor stock hand over fist since it is available at a solid discount to the tech-laden Nasdaq-100 index's earnings multiple of 31. The long-term opportunity in the custom AI chip market could help the chipmaker maintain elevated growth levels for a long time to come. Micron Technology made its name by supplying compute and storage memory chips that are used in computers and smartphones. The company got a serious boost recently from the deployment of some of its products in AI data centers. The high-bandwidth memory (HBM) manufactured by Micron plays a key role in AI accelerators such as graphics processing units (GPUs) and custom processors as it can transfer data at high speeds while keeping power consumption in check when compared to traditional memory. HBM ensures that a lot of data can be transferred quickly at low latency so that AI workloads can run smoothly. Not surprisingly, the size of the HBM that's being packed by AI chip designers into their accelerators is increasing. AMD, for instance, has increased the HBM capacity of its latest MI350 series of AI accelerators to 288 gigabytes (GB) from 256 GB on the previous MI325 series processors. The company plans to equip its next generation of MI400 accelerators with a whopping 432 GB of HBM next year. Even custom AI chip manufacturers such as Marvell and Broadcom are equipping their chips with HBM to speed up AI workloads and improve power efficiency. Not surprisingly, the HBM market's revenue is expected to soar to $86 billion in 2030 from just $1.8 billion in 2023, clocking a compound annual growth rate (CAGR) of 68%. Meanwhile, the adoption of AI in the smartphone and PC markets is going to be another tailwind for Micron, driving both volume and unit growth for the company. That's because AI-capable smartphones and PCs are equipped with more compute and storage memories, which should expand Micron's addressable market at a nice pace in the future. The good part is that the AI-driven growth of the memory market has already supercharged Micron's growth. Its revenue in the first six months of the current fiscal year has increased by 59% from the year-ago period. Moreover, Micron has swung to a GAAP profit of $3.08 per share in the first half of the fiscal year from a loss of $0.40 per share in the year-ago period. Consensus estimates expect Micron to deliver an impressive 439% jump in adjusted earnings this year to $7 per share, followed by a 58% increase next year. Micron stock trades at just 11 times forward earnings right now. So, buying this AI stock looks like a no-brainer as the bright prospects of the memory market could help it sustain healthy earnings growth levels in the long run as well, paving the way for more upside. Before you buy stock in Micron Technology, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Micron Technology wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices. The Motley Fool recommends Broadcom and Marvell Technology. The Motley Fool has a disclosure policy. Undervalued and Profitable: 2 Artificial Intelligence (AI) Stocks for Long-Term Portfolios was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Malay Mail
14 hours ago
- Business
- Malay Mail
US may target Samsung, Hynix, TSMC operations in China, sources say
WASHINGTON, June 21 — The US Department of Commerce is considering revoking authorisations granted in recent years to global chipmakers Samsung, SK Hynix and TSMC, making it more difficult for them to receive US goods and technology at their plants in China, according to people familiar with the matter. The chances of the United States withdrawing the authorisations are unclear. But with such a move, it would be harder for foreign chipmakers to operate in China, where they produce semiconductors used in a wide range of industries. A White House official said the United States was 'just laying the groundwork' in case the truce reached between the two countries fell apart. But the official expressed confidence that the trade agreement would go forward and that rare earths would flow from China, as agreed. 'There is currently no intention of deploying this tactic,' the official said. 'It's another tool we want in our toolbox in case either this agreement falls through or any other catalyst throws a wrench in bilateral relations.' Shares of US chip equipment makers that supply plants in China fell when the Wall Street Journal first reported the news earlier yesterday. KLA Corp dropped 2.4 per cent, Lam Research fell 1.9 per cent and Applied Materials sank 2 per cent. Shares of Micron, a major competitor to Samsung and SK Hynix in the memory chip sector, rose 1.5 per cent. A TSMC spokesman declined comment. Samsung and Hynix did not immediately respond to requests for comment. Lam Research, KLA and Applied Materials did not immediately respond, either. In October 2022, after the United States placed sweeping restrictions on US chipmaking equipment to China, it gave foreign manufacturers like Samsung and Hynix letters authorising them to receive goods. In 2023 and 2024, the companies received what is known as Validated End User status in order to continue the trade. A company with VEU status is able to receive designated goods from a US company without the supplier obtaining multiple export licenses to ship to them. VEU status enables entities to receive US-controlled products and technologies 'more easily, quickly and reliably,' as the Commerce Department website puts it. The VEU authorisations come with conditions, a person familiar with the matter said, including prohibitions on certain equipment and reporting requirements. 'Chipmakers will still be able to operate in China,' a Commerce Department spokesperson said in a statement when asked about the possible revocations. 'The new enforcement mechanisms on chips mirror licensing requirements that apply to other semiconductor companies that export to China and ensure the United States has an equal and reciprocal process.' Industry sources said that if it became more difficult for US semiconductor equipment companies to ship to foreign multinationals, it would only help domestic Chinese competitors. 'It's a gift,' one said. — Reuters
Japan Times
14 hours ago
- Business
- Japan Times
U.S. may target Samsung, Hynix and TSMC operations in China
The U.S. Department of Commerce is considering revoking authorizations granted in recent years to global chipmakers Samsung, SK Hynix and TSMC, making it more difficult for them to receive U.S. goods and technology at their plants in China, according to people familiar with the matter. The chances of the United States withdrawing the authorizations are unclear. But with such a move, it would be harder for foreign chipmakers to operate in China, where they produce semiconductors used in a wide range of industries. A White House official said the United States was "just laying the groundwork" in case the truce reached between the two countries fell apart. But the official expressed confidence that the trade agreement would go forward and that rare earths would flow from China, as agreed. "There is currently no intention of deploying this tactic," the official said. "It's another tool we want in our toolbox in case either this agreement falls through or any other catalyst throws a wrench in bilateral relations." Shares of U.S. chip equipment makers that supply plants in China fell when the Wall Street Journal first reported the news earlier on Friday. KLA Corp dropped 2.4%, Lam Research fell 1.9% and Applied Materials sank 2%. Shares of Micron, a major competitor to Samsung and SK Hynix in the memory chip sector, rose 1.5%. A TSMC spokesman declined comment. Samsung and Hynix did not immediately respond to requests for comment. Lam Research, KLA and Applied Materials did not immediately respond, either. In October 2022, after the United States placed sweeping restrictions on U.S. chipmaking equipment to China, it gave foreign manufacturers like Samsung and Hynix letters authorizing them to receive goods. In 2023 and 2024, the companies received what is known as Validated End User status in order to continue the trade. A company with VEU status is able to receive designated goods from a U.S. company without the supplier obtaining multiple export licenses to ship to them. VEU status enables entities to receive U.S.-controlled products and technologies "more easily, quickly and reliably," as the Commerce Department website puts it. The VEU authorizations come with conditions, a person familiar with the matter said, including prohibitions on certain equipment and reporting requirements. "Chipmakers will still be able to operate in China," a Commerce Department spokesperson said in a statement when asked about the possible revocations. "The new enforcement mechanisms on chips mirror licensing requirements that apply to other semiconductor companies that export to China and ensure the United States has an equal and reciprocal process.' Industry sources said that if it became more difficult for U.S. semiconductor equipment companies to ship to foreign multinationals, it would only help domestic Chinese competitors. "It's a gift," one said.
Yahoo
18 hours ago
- Business
- Yahoo
Which chipmakers are at risk if US revokes China waivers?
The US may be preparing to revoke waivers that let global chipmakers send American tech to China, according to the Wall Street Journal. This move could hit firms hard in South Korea and Taiwan. Wedbush Securities managing director of equity research Matt Bryson joins Market Domination to explain what this potential policy shift could mean for the chip sector's supply chain and key players like Samsung ( SK Hynix ( and Taiwan Semiconductor Manufacturing Company (TSM). To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Let's start with this report, Matt. I mean, certainly the journal made a lot of headlines with it. They're saying, listen, the US might indeed revoke or cancel these waivers that allow global chip makers to send American tech to China. You know this sector, Matt, well, you've covered the industry for a long time. You saw that headline and that report. What what did you make of it? Um, well, I immediately thought about the the Korean memory makers, right? In in the sense that both Samsung and Hynix produce a lot of product, um, in China. It's a bit unclear to me exactly what proportion of that product might be affected. Is it all of it? Is it some some portion of it? But I I mean that's that's what struck me right away. When we talk about this American tech that's going to China, what kind of American tech are we are we talking about exactly, Matt? Yeah, so I'm thinking it's the semiconductor capital equipment. Uh so you you're talking about uh fly materials, you you're talking about lamb, um, and I'm assuming it's used in in some sort of process tech. So I I'm not sure if there's there's a point in in the sense that it's only the more advanced technology that that that's being restricted or if there's no cutoff point, um, but at least that would be my assumption. But again, there's there's not a there's not a ton of clarity around exactly what might be restricted. Would you guess, Matt, if we talk about the kind of chips that might be impacted here, would you think it would be, you know, the latest and greatest chips? Would it be more memory, more logic? The kind of chips that would go into your car, your consumer electronics? What do you think? Yeah, so if you're looking at at those Taiwanese companies, uh so you're talking UMC, uh you're talking Taiwan Semi. The the amount of manufacturing they have in China is is minimal, right? You're talking for both those vendors, low single digits. Um those are uh they're more mature technologies. So those would be the types of chips that would go into your car. Um but again, they have they have product elsewhere. Um I tend to think about them using those Chinese fabs to make product for China. So it just wouldn't really have much impact on us, wouldn't have much impact on their top or bottom line. On the memory side though, you you're talking much larger kind of portions of of Hynix and and Samsung output. And then certain products are are somewhat unique. So Intel's old memory fab which is in Dalian, China, it makes a high capacity NAND chip that really isn't comparable to what anyone else makes. Uh Hynix has been able to dominate the the market for high capacity SSDs. Um and so if that's affected, it it it has some real ramifications uh for the market since most of that product ends up in the US. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
a day ago
- Business
- Bloomberg
Chip Stocks Slide on Report of New Possible Limits on China
Shares of Taiwan Semiconductor Manufacturing Co. and other chipmakers slid on Friday after the Wall Street Journal reported that the Trump administration is considering further restrictions on China. A US official told top global semiconductor makers that he wanted to revoke waivers they have used to access American equipment in China, the Journal said, citing unidentified people familiar with the matter said. Such a move is expected to escalate trade tensions, the newspaper reported.
