Susquehanna Calls The Bottom On Semiconductor Stocks, Upgrades 3 Key Players

Susquehanna upgraded three major semiconductor stocks in a Thursday analyst note to investors, signaling a bottom for the semiconductor downcycle in the handset, PC, and consumer end markets.

Analyst Christopher Rolland upgraded:

• Intel Corporation INTC from a Negative to a Neutral rating, and raised the price target from $23 to $26.
• Qualcomm Inc QCOM from a Neutral to a Positive rating, and raised the price target from $130 to $140.
• Skyworks Solutions Inc SWKS from a Neutral to a Positive rating, and raised the price target from $110 to $135.

The upgrade is based on several factors, reflecting a more positive outlook on their growth potential and competitive positioning.

See Also: Intel Business Model 'Structurally Misaligned With Industry Direction,' Analyst Says

Rolland’s Intel upgrade is based on the company's ability to stabilize its market share against competitors, improved roadmap execution, and the fading impact of the work-from-home (WFH) PC hangover. Despite facing several long-term headwinds, Rolland said Intel has taken steps to reduce its free cash flow burn by implementing cost-cutting plans and reducing capex.

Rolland praised Qualcomm for successfully refocusing on the midrange market share, benefiting from China's reopening as a catalyst. Additionally, Qualcomm has differentiated its product offerings through artificial intelligence (AI), software, and organic technology. Further, Rolland said the impact of Qualcomm losing a major customer has been baked into investor sentiment, and the company still has potential earnings in the years ahead.

Read also: Qualcomm To Bring ChatGPT-Like AI To Smartphones, And Maybe Even Cars

Skyworks’ upgrade is based on a refocus on the Chinese market, continued growth opportunities with Apple Inc AAPL, the development of core competency in a specific technology, and successful diversification through a strategic acquisition, Rolland explained.

The company trades at a discount compared to its peers, making it an attractive semiconductor investment option.

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