TSM

Nvidia Rockets Higher to Propel Large Cap Growth

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Image: Nvidia powers higher after releasing better-than-expected second-quarter fiscal 2024 guidance. The company continues to be a driver behind the outperformance of large cap growth as a stylistic area. By Brian Nelson, CFA We haven’t seen a quarterly guidance beat like this since Synaptics (SYNA) put up a monster quarter when Apple (AAPL) started using its innovative click-wheel technology in the first-generation iPod, almost 20 years ago. Nvidia Corp.’s (NVDA) outlook for the second quarter of its fiscal 2024 was phenomenal thanks to tremendous interest in its chips that power artificial intelligence [AI]. We expect a material increase in our fair value estimate of Nvidia, but shares remain quite pricey, in our view. Revenue during Nvidia’s fiscal second quarter is … Read more

Taiwan Semiconductor Experiences Revenue Weakness in March

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Image: Taiwan Semiconductor’s shares have rallied nicely since the beginning of November of last year. By Brian Nelson, CFA Taiwan Semiconductor (TSM) reported March revenue on April 10. During the month, net revenue dropped nearly 11% on a sequential basis and more than 15% on a year-over-year basis from March 2022. Though the top-line weakness in the month was somewhat of a surprise, the company’s revenue advanced 3.6% during the first quarter of this year. The Taiwanese chip fabricator is an idea for the risk-seeking investor that is looking for exposure to the semiconductor space. The company pays a decent dividend yield, and the high end of our fair value estimate for shares stands at $90 per share. Taiwan Semiconductor’s … Read more

Follow Up on Intel’s Dividend Cut: We Will Strive to Do a Better Job Communicating

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The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. By Brian Nelson, CFA As noted in our brief note on Intel this morning, “Intel Cuts Dividend, As Expected,” we have now refreshed the company’s reports on the website, with updated Dividend Safety and Dividend Growth Potential ratings, both as VERY POOR. After factoring in Intel’s updated outlook to our valuation model from its fourth-quarter release, our … Read more

Intel Cuts Dividend, As Expected

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  Image Source: Aaron Fulkerson By Brian Nelson, CFA The Dividend Cushion ratio caught another dividend cut. This time it was Intel’s (INTC). With a Dividend Cushion ratio of 0.4, Intel announced February 22 that it has slashed its dividend by nearly two thirds, to $0.125 on a quarterly basis, down from its prior quarterly dividend of $0.365. The company’s estimated forward yield now stands at ~1.9%, and we can’t say that the dividend cut was unexpected given its massive net debt position and significantly weakened free cash flow generation–the two most important components behind an assessment of its cash-based intrinsic value and dividend health. Intel’s fourth-quarter results and outlook for 2023, released January 26, were atrocious. Here’s what we … Read more

We Don’t Think Intel Will Spoil the Tech Rally

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Image Shown: The Invesco QQQ ETF (QQQ) has broken through its technical downtrend, and we don’t think Intel’s poor outlook will derail this tech rally. Image Source: TradingView By Brian Nelson, CFA The Invesco QQQ ETF (QQQ) has rallied more than 12% to start 2023, and we don’t think much will derail the advance. The pace of inflation looks like it peaked in June 2022 and save for a few big quarterly earnings misses from Goldman Sachs (GS) and Intel (INTC), fourth-quarter 2022 earnings season is shaping up better than feared for a lot of companies. The labor market is easing a bit, and a breakout of both the equal-weight S&P 500 (RSP) and the market-cap weight S&P 500 (SPY) … Read more

Our Reports on Stocks in the Technology Giants Industry

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Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free. Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The … Read more

Apple iPhone Supply Disruptions Not Likely to Hurt Markets with Overall Holiday Sales Reportedly Strong

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Image: Holiday sales are expected to expand ~2.5% in 2022 over very strong growth in 2021 and 2020. Image Source: Adobe By Brian Nelson, CFA Tesla (TSLA) CEO Elon Musk and Apple (AAPL) CEO Tim Cook seemingly have worked out a plan for Apple to keep advertising on the Twitter platform after what looked to be a temporary pause by the iPhone maker. Though the news is immaterial to our thesis on Apple in any respect, it was good to see the two tech giants work whatever differences they had out. Certainly, a fallout between Musk and Cook would not be a good thing for the tech sector and innovation, more broadly, as the two wield large influences across Silicon … Read more

ASML Launches Big Buyback; Lithography Systems Well Positioned for Demand Growth

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Image: ASML has been one of the most successful semiconductor companies thanks in part to the firm’s advanced lithography systems that continue to meet customer demands for size and cost efficiencies. Image Source: ASML By Brian Nelson, CFA ASML Holding N.V. (ASML) is one of the most prolific innovators in the semiconductor industry. The firm provides chipmakers with hardware, software and services to make patterns on silicon with lithography, a vital system in the chip-manufacturing process that increases chip value while lowering costs. The resolution of ASML’s lithography systems contributes to the ever-shrinking nature of transistors and microchips needed for ongoing industry innovation. Smaller and smaller chips save on energy, cost and time, and the wavelength of the light used … Read more

Taiwan Semiconductor’s Operations Remain Solid But Uncertainty Has Punished the Stock

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Image: Taiwan Semiconductor’s shares have faced considerable pressure during 2022, despite strong operational performance. By Brian Nelson, CFA Taiwan Semiconductor Manufacturing Company’s (TSM) shares have been cut in half this year as weakness across the tech space, uncertainty regarding new export restrictions, geopolitical tensions concerning China-Taiwan relations given Russia’s invasion of Ukraine, and general market malaise, particularly across the chip sector, have weighed on the company. Our fair value estimate stands at $66, about in-line with where they are trading at the time of this writing. One really wouldn’t think TSM’s shares would be down so much during 2022 given the company’s recent fundamental performance, however. When it reported third-quarter results October 13, revenue advanced 35.9%, while third-quarter earnings per … Read more

ALERT: Replacing Qualcomm with McDonald’s in Dividend Growth Newsletter Portfolio

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Image: The semiconductor space is experiencing a number of headwinds, and while we still like Qualcomm’s long-term prospects, we’re replacing it with McDonald’s in the simulated Dividend Growth Newsletter portfolio. Image Source: Qualcomm By Brian Nelson, CFA The technology industry has been wrecked during 2022, and the semiconductor space has been no exception. The VanEck Semiconductor ETF (SMH) is down ~41% so far this year, as many of its top holdings, including wireless technology giant Qualcomm (QCOM) languish. As we walk through our views in this work, please note that Qualcomm’s fiscal third-quarter 2022 is calendar second quarter and its fiscal fourth-quarter 2022 is calendar third quarter. We recently highlighted our expectations for near-term weakness across the semiconductor space in … Read more