There are better buying opportunities in semiconductor stocks than Micron Technology Inc, says a senior research analyst at Piper Sandler.
Harsh Kumar picks Broadcom over Micron
Harsh Kumar sees MU as more sensitive to supply pressures and recommends Broadcom Inc (NASDAQ: AVGO) as a better alternative for investors interested in playing the data centre space. On CNBC’s “TechCheck”, he said:
Data centre is a bright area that we love and we are huge fans of Broadcom, which is our top pick. We want to be positioned in differentiated chipmakers that are not at the whim of pricing of a commodity play. So, Broadcom, we think, is a much better play than Micron.
The software side of Broadcom that renders pricing power to the California-headquartered company was among other reasons why he likes AVGO. Earlier this month, Broadcom reported solid results for its fiscal Q1 and offered upbeat guidance for the future.
Two other names that pop out to the Piper Sandler analyst
In terms of valuation, where Harsh sees opportunity is Qualcomm Inc. He’s also bullish on Nvidia Corporation (NASDAQ: NVDA) that many expect will be the first trillion-dollar semiconductor company.
QCOM at 12 times is a much better place to be than Micron. Then, Nvidia is a different story. There’s a fundamental shift going on where Nvidia is transitioning from hardware to software-centric. Extremely high margins, huge opportunities at extremely good growth.
Harsh’s comments come a day after Micron gave better-than-expected guidance for its current quarter. The iShares Semiconductor ETF is still down more than 10% for the year.
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