During his Asia tour in Taiwan, semiconductor expert Vijay Rakesh of Mizuho met with some of key handset component, wafer and final test OEMs and foundries. The top analyst left the meetings with the warm sense of commercial success for NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM, Inc. (NASDAQ:QCOM) and Intel Corporation (NASDAQ:INTC).
For NVDA, Rakesh sees stronger trends into SepQ and the DecQ. According to the analyst, NVDA is also seeing better shipment trends on its Volta and GPU chips based on back end feedback, with strength continuing into the DecQ. Back end OEMs are also planning on a stronger capacity allocation to NVDA for 2018.
Rakesh rates NVDA a Buy with a price target of $180, which implies a slight upside from current levels.
With respect to QCOM, the analyst believes the chip maker is seeing better handset design wins into 2H17 and 2018 as Taiwanese fabless semiconductor firm Mediatek appears to bow out at the high-end. Rakesh stated, “We believe while QCOM is besieged by IP litigation issues, its handset segment continues to do well with design wins at the China handset OEMs with its leading edge 800-series. Also, we believe Mediatek continues to see issues and could potentially focus more on the mid- and low-end handset segments, mostly giving up on the high-end X series, with its highest end offering being the Cat 7 P23 series, as QCOM focuses on a more robust high-end roadmap with Cat 7/10/12 capabilities on the high end 800/835/845-seires. We believe any Mediatek competition to QCOM in 2H17 and 2018 will be very limited, positioning QCOM well.”
Rakesh rates QCOM a Buy with a price target of $65, which represents a potential upside of nearly 25%
Finally, Rakesh points out that Intel is seeing improved handset orders into 2018, with the potential to pull its modem in-house from foundry TSMC. “Our checks with the back-end test OEMs point to stronger INTC modem orders into 2H17 but also plans for more modem capacity into 2018. We believe based on our checks that INTC could be planning on pulling its modem business in-house from its current foundry partner TSMC,” the analyst opined.
The analyst rates INTC a Buy with a price target of $42, just 13% higher than Wednesday’s $37.07 closing price.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Vijay Rakesh has a yearly average return of 28.1% and a 72% success rate. Rakesh is ranked #33 out of 4658 analysts.