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These Highflying Chip Stocks Are Supported By Sustained Tailwinds

Top semiconductor stocks Nvidia (NVDA) and Monolithic Power Systems (MPWR) have room to run higher, a Wall Street analyst said Friday. Both fabless chipmakers are trading near record high territory amid healthy market dynamics.




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In a note to clients, Truist Securities analyst William Stein reiterated his buy ratings on both semiconductor stocks and raised his price targets. He upped his price target on Nvidia to 257 from 230. He increased his target on Monolithic stock to 556 from 474.

On the stock market today, Nvidia stock fell 1.5% to close at 219. Monolithic stock dipped 0.3% to 497.52.

Nvidia stock hit a record high of 230.43 on Aug. 30. It broke out of a cup-with-handle base at a buy point of 207.43 on Aug. 20, according to IBD MarketSmith charts.

Meanwhile, Monolithic stock notched an all-time high of 505.82 on Sept. 7. It broke out of a 25-week consolidation period at a buy point of 406.85 on July 22.

Stein said he is incrementally more bullish on both companies after recent meetings with corporate executives.

Semiconductor Stocks Rated ‘Best Ideas’

Stein called Nvidia his “best large-cap growth idea” among semiconductor stocks. He said Monolithic is his “best SMID (small and mid) cap growth idea.”

Nvidia has sustained growth drivers in graphics processors for gaming, data center and automotive applications, he said.

Monolithic is transitioning from a semiconductor company to a higher-value technology solutions provider, he said. It is moving from power management chips to more complex system modules, Stein said.

Nvidia stock and Monolithic stock are tied for first place among 29 semiconductor stocks in IBD’s fabless chipmaker industry group, according to IBD Stock Checkup. Each has a best-possible IBD Composite Rating of 99. The Composite Rating scores a stock’s key growth metrics against all other stocks regardless of industry group.

The fabless chipmaker industry group ranks fourth out of 197 industry groups for recent market performance.

Nvidia and Monolithic are on the IBD 50 list of top-performing growth stocks. Nvidia is on five IBD watchlists, including Leaderboard.

Elsewhere on Wall Street, BofA Securities raised its price target on Nvidia to 275 from 260. The BofA research team named Nvidia one of its “top picks” among semiconductor stocks along with Advanced Micro Devices (AMD), Broadcom (AVGO) and ON Semiconductor (ON).

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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