Is it still worth buying semiconductors into 2021?

The COVID-19 pandemic hit 2020 especially hard, but markets have recovered handily to near all-time highs. This recovery has been largely on the back of big tech stocks, and the tip of the spear has been semiconductors.

Major semiconductors have been one of the most wildly successful industries this year, and many people view it as a leading indicator for the broad markets.

The S&P 500 and Dow Jones industrial average are up 15% and 6% year to date, respectively.

Of all the semiconductor stocks in the S&P 500, only one stock has underperformed either of these indexes in this time.

The question for many investors is whether semiconductor stocks can keep up this rally and keep the markets hitting all-time highs.

24/7 Wall St. has reviewed some of these major semiconductor stocks to see if they have the potential to keep running in 2021.

We have included a brief trading history on each stock, as well as what analysts are saying about it.

Nvidia

The biggest winner among the major semiconductor stocks has been Nvidia Corp. (NASDAQ: NVDA), posting a gain of 120% year to date.

The chips that Nvidia sells are used across a broad spectrum of computing, ranging from artificial intelligence and autonomous vehicles to gaming and even supercomputing. Considering all these trends are just hitting their stride, Nvidia could see smooth sailing through the coming year.

Nvidia stock has traded mostly between $515 and $520 per share in recent days. The 52-week trading range is $180.68 to $589.07. The consensus price target is $592.84.

Over the past five years, Advanced Micro Devices Inc. (NASDAQ: AMD) stock has seen a meteoric rise. It was valued under $5 as recently as 2016.

This firm’s chips have been used in bitcoin mining rigs, and they are fairly popular in the gaming community. In fact, AMD chips power the new iterations of both the Xbox and PlayStation.

AMD stock recently reached a 52-week high of $97.98 but retreated after to less than $92, near the consensus price target of $91.59.

The stock has traded as low as $36.75 in the past year. Year to date, AMD stock is up nearly 98%.

Qualcomm

Qualcomm Inc. (NASDAQ: QCOM) shares are up 68% year to date. This company’s chips are a staple for 5G smartphones.

With the next generation of smartphones already here, and more consumers wanting to get on the new 5G networks, the market is there for Qualcomm. Some analysts are calling for over 60% compound annual growth for these smartphone chipsets.

The consensus price target of $164.56 would be an alltime high. Shares recently traded below $150, in a 52-week range of $58.00 to $161.07.

Broadcom

Another semiconductor stock that has seen exponential growth over the past five years is Broadcom Inc. (NASDAQ: AVGO).

However, this has slowed a bit due to the pandemic, and the stock is only up about 36% year to date.

Broadcom has made a slew of acquisitions in the past few years, building up a diversified portfolio. The firm has a solid partnership with Apple, with this accounting for about 20% of its 2019 revenues.

As Apple continues to thrive, Broadcom will have a hand in it too.

Broadcom stock still trades near the recent 52-week high of $437.27, well up from the 52-week low of $155.67. The consensus price target is up at $460.32.

Micron Technology

Shares of Micron Technology Inc. (NASDAQ: MU) could be poised to take off in 2021, thanks to increasing demand for memory chips. In its most recent earnings report, the firm lifted its guidance for the fiscal first quarter, citing a couple of catalysts.

Namely, the increased usage of cloud services is precipitating an increased demand for data centers. Also, 5G seems to be a rising tide that could lift most semiconductors.

Micron stock recently traded around $71, in a 52-week range of $31.13 to $74.61. Analysts have a consensus price target of $78.06.

Intel

Intel Corp. (NASDAQ: INTC) is worth mentioning here as the black sheep of the group.

This is the only semiconductor stock in the S&P 500 that is at a loss this year. Its share price is down over 17% year to date.

There has been some buzz about this stock recently, however, as hedge fund Third Point wants to make big changes at Intel.

Reportedly, Third Point owns roughly $1 billion in Intel stock. It recently released a letter detailing the changes that it wants to see in Intel.

The question remains: is it too late for Intel to catch up to the rest of the industry?

Intel stock has yet to recover fully from the pandemic selloff last March.

Shares are trading closer to the 52-week low of $43.61 than the high of $69.29. The consensus price target is $52.05.