Semiconductors Watchlist: Cramer Likes Qualcomm, Marvell

Shares of chipmakers including Micron Technology  (MU) - Get Report rose this past week after the world’s biggest semiconductor maker, Taiwan Semiconductor Manufacturing  (TSM) - Get Report said it plans to spend $100 billion over the next three years to expand its chip fabrication capacity.

White House national security and economic officials will meet with semiconductor makers and auto company representatives later this month on Apr. 12 to discuss the impact ongoing computer chip shortages are having on the U.S., according to a published report Thursday.

Amid the chip shortage, Jim Cramer has been focused on companies like Applied Materials  (AMAT) - Get Report and Lam Research  (LRCX) - Get Report, which make the machines needed to eliminate the shortage. Cramer spoke to Micron this past week, and the company reported that they are seeing tightness throughout the food chain.

Cramer said he likes Marvell  (MRVL) - Get Report, Broadcom  (AVGO) - Get Report, Nvidia  (NVDA,) - Get Report and Lam Research  (LRCX) - Get Report in addition to  (AMD) - Get Report and Applied Materials.

"People have to realize that we have a terrible chip shortage," Cramer said. Yet, Applied Materials stock is up 240% in the past year.

"I do like Marvell because of 5G, I like Qualcomm  (QCOM) - Get Report because they're going to make their numbers and then some, I like Invenias as a longer-term play because gaming, artificial intelligence, and the overly-used machine learning is really big, I like Lam Research, which we sold way too soon yet made a ton of money, and I do like AMD," Cramer said.

"And, once again, Advanced Micro Devices is being kept down now because Intel  (INTC) - Get Report is trying to do better," he added. 

For more in-depth coverage of the semiconductor sector including trading recommendations and investment strategies, follow Eric Jhonsa on Real Money.

Here is a list of the semiconductor stocks to watch and their performance by percentage change at the close of trading on Thursday, Apr. 8:

Nvidia Corp | +7.22%

Nvidia  (NVDA) - Get Report is finally trading better, bouncing off long-term support and clearing last month's high. It has been a rewarding investment but a frustrating trading vehicle.

However, shares have put in a solid rally lately as the stock works on its fourth straight daily gain and its sixth rally in the last seven sessions. That said, the stock is trading at the same level it was at the beginning of September, wrote TheStreet's Bret Kenwell.

TheStreet Quant Ratings rates Nvidia as a Buy with a rating score of B.

Nxp Semiconductors | +3.61%

Shares of NXP Semiconductors  (NXPI) - Get Report were lower Thursday after the chipmaker was downgraded to equal-weight from overweight by analysts at Morgan Stanley.

The investment firm raised its price target on NXP to $213 a share from $190. The stock of the Eindhoven, Netherlands, company has seen its multiple expand significantly, Morgan Stanley said.

"After a period of outperformance, NXPI has closed the previous valuation gap relative to peers," analyst Craig Hettenbach said. 

NXP has outperformed broad-based suppliers by 115%, according to Morgan Stanley, and the S&P 500 by 160%, driven by its inclusion into the S&P index in March. That rise gives NXP less room to run higher. 

TheStreet Quant Ratings rates NXP Semiconductors as a Buy with a rating score of B-.

Intel Corp | +4.69%

Intel  (INTC) - Get Report announced plans to directly compete with TSMC  for the business of manufacturing chips for other companies. 

It will commit $20 billion to build two new factories in Arizona as it plans to evolve into both a designer and manufacturer and next-generation computer and smartphone chips while also developing a new business -- thanks in part to a development partnership with IBM  (IBM) - Get Report -- that allows other companies to use its Arizona hub to make their own semiconductors.

TheStreet Quant Ratings rates Intel as a Buy with a rating score of B+.

Advanced Micro Devices | +6.27%

Chipmaker Advanced Micro Devices'  (AMD) - Get Report $35 billion deal to acquire Xilinx  (XLNX) - Get Report has been approved by shareholders of both chipmakers.

AMD, of Santa Clara, Calif., last October agreed to acquire Xilinx, San Jose, Calif. Under the terms, AMD will pay 1.7234 shares for each Xilinx share.

“The acquisition will bring together two industry leaders with complementary product portfolios and customers,” the companies said in a statement.

TheStreet Quant Ratings rates AMD as a Buy with a rating score of B.

Taiwan Semiconductor Manufacturing | +4.13%

Taiwan Semiconductor Manufacturing  (TSM) - Get Report boosted its near-term investment plans on Mar. 31, pledging to spend $100 billion over the next three years to increase production capacity, including a previously-announced factory it will build in Arizona.

"You're in good shape there. I would buy it at these levels," Jim Cramer said of the company on Tuesday.

TheStreet Quant Ratings rates TSM as a Buy with a rating score of A.

Qualcomm | +5.59%

U.S, antitrust regulators have dropped their lawsuit against Qualcomm  (QCOM) - Get Report that accused the company of abusing its dominant position in chips that power smartphones.

The Federal Trade Commission said this past week that it won’t seek a Supreme Court review of the federal appeals court decision last year that found Qualcomm’s practices weren’t anti-competitive.

TheStreet Quant Ratings rates Qualcomm as a Buy with a rating score of B.

Broadcom | +4.68%

Broadcom  (AVGO) - Get Report shares were rising to start this past week but fell slightly after a media report said Amazon  (AMZN) - Get Report is working on its own chips to power its networks, which could reduce its dependence on the semiconductor giant.

TheStreet Quant Ratings rates Broadcom as a Buy with a rating score of A-.

Micron Technology | +7.81%

Micron Technology  (MU) - Get Report rose this past week after the largest U.S. maker of memory chips reported fiscal-second-quarter revenue and adjusted earnings that exceeded Wall Street estimates. The company's adjusted earnings more than doubled to 98 cents a share from 45 cents a share in the year-earlier period.

As the global semiconductor shortages continue to grow as demand outstrips supply, the company said this past week that the shortage will be with us for a while. 

TheStreet Quant Ratings rates Micron as a Buy with a rating score of B.

Texas Instruments | +2.96%

Texas Instruments  (TXN) - Get Report announced Tuesday that it will webcast its first-quarter 2021 earnings conference call on Tuesday, April 27. 

Rafael Lizardi, senior vice president, and chief financial officer, and Dave Pahl, vice president and head of Investor Relations, will discuss TI's financial results and answer questions from the investor audience.

TheStreet Quant Ratings rates Texas Instruments as a Buy with a rating score of A.

AMD, Broadcom, and Nvidia are key holdings in Jim Cramer's Action Alerts PLUS charitable trust. Want to be alerted before Jim Cramer buys or sells any stock? Learn more from Cramer and his membership team now.