5 Semiconductor Stocks That Outperformed Bitcoin in 2021

Rising investor interest in cryptocurrencies, drove Bitcoin (BTC) to a record-high of $68,493.30 on November 8th.  However, BTC pulled back in December, ending 2021 with a 48.4% gain.

A number of chip stocks actually had better returns than BTC last year.  That’s because heightened semiconductor demand from various industries and favorable government policies caused major chip stocks to surge in 2021. This growth is expected to continue, as the global semiconductor market is expected to grow at a 7.8% CAGR and reach $553.60 billion by 2026.

Prominent chip stocks NVIDIA Corporation (NVDA), Marvell Technology, Inc. (MRVL), ON Semiconductor Corporation (ON), Synaptics Incorporated (SYNA), and Lattice Semiconductor Corporation (LSCC) outperformed Bitcoin significantly in 2021. Let’s discuss these stocks in detail.

NVIDIA Corporation (NVDA)

NVDA designs and manufactures computer graphics processors, chipsets, and related multimedia software used in the gaming, professional visualization, data center, and automotive markets. Its products are sold to OEMs, ODMs, system builders, add-in board manufacturers, retailers/distributors, Internet and cloud service providers, mapping companies, and other ecosystem participants.

On January 4, 2022, NVIDIA unveiled more than 160 gaming and Studio GeForce-based laptop designs, new GeForce RTX GPUs and technologies, new RTX-accelerated content, and announced the expansion of both GeForce NOW cloud gaming and the NVIDIA Studio ecosystem, including the launch of NVIDIA Omniverse, at the CES 2022 event. The company expects these additions to further establish GeForce as the ultimate platform for gamers and creators.

NVDA’s total revenue for its fiscal 2022 third quarter ended October 31, 2021, increased 50.3% year-over-year to $7.10 billion. The company’s non-GAAP gross profit came in at $4.76 billion, representing a 53.8% year-over-year improvement. Its non-GAAP income from operations came in at $3.39 billion for the quarter, indicating a 69.9% rise from the prior-year period. NVDA’s non-GAAP net income came in at $2.97 billion, up 62.1% from the year-ago period. Its non-GAAP EPS increased 12.5% year-over-year to $1.17. The company had $1.29 billion in cash and cash equivalents as of October 31, 2021.

Analysts expect the company’s EPS to increase 73.6% year-over-year to $4.34 in the fiscal year 2022, ending January 31, 2022. It surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive. The consensus revenue estimate of $26.68 billion for the same fiscal year represents a 60% rise from the prior-year period. NVDA’s EPS is expected to grow at a 39.4% rate per annum over the next five years. The stock gained 125.3% in 2021.

Marvell Technology, Inc. (MRVL)

MRVL is a semiconductor manufacturer that offers a security and networking platform, secure data processing, networking, and storage solutions. It designs, develops, and sells analog, mixed-signal, digital signal processing, embedded and standalone integrated circuits, and a portfolio of Ethernet solutions.

On December 7, 2021, MRVL announced its collaboration with OE Solutions, a leading supplier of optoelectronic transceiver solutions for broadband wireless and wireline markets, to deliver the industry’s first production-ready 100G QSFP-DD optical modules optimized for 5G backhaul and Metro Access applications. The OE Solutions 100G QSFP-DD Coherent Transceiver with the Marvell Deneb Coherent DSP will enable the transition of 10G to 100G coherent solutions, delivering unprecedented performance and scalability. The companies are looking forward to gaining widespread recognition and benefit from the accelerating deployment of 5G infrastructure worldwide.

For its fiscal 2022 third quarter, ended October 30, 2021, MRVL’s net revenues increased 61.5% year-over-year to $1.21 billion. The company’s non-GAAP gross profit came in at $788.35 million, up 66.7% from the prior-year period. Its non-GAAP operating income came in at $417.82 million, representing a 68.9% rise from the year-ago period. Its non-GAAP net income increased 116.4% year-over-year to $364.32 million. MRVL’s non-GAAP EPS came in at $0.43, indicating a 72% year-over-year improvement. The company had $523.50 million in cash and cash equivalents as of October 30, 2021.

The consensus EPS estimate of $1.55 for the fiscal year 2022 ending January 31, 2022, represents a 68.5% rise from the prior-year period. It surpassed the consensus EPS estimates in each of the trailing four quarters. Analysts expect MRVL’s revenue to rise 49.7% year-over-year to $4.44 billion in the same fiscal year. MRVL’s EPS is expected to grow at a rate of 42.8% per annum over the next five years. Last year, the stock gained 84%.

ON Semiconductor Corporation (ON)

ON manufactures and sells semiconductor components for various electronic devices worldwide. The company operates through three segments ─ Power Solutions Group (PSG); Advanced Solutions Group (ASG); and Intelligent Sensing Group (ISG). It serves OEMs, distributors, and electronic manufacturing service providers.

On January 4, 2022, ON and emotion3D, a leading provider of camera-based automotive in-cabin analysis software, announced a joint reference design for driver and occupant monitoring systems (DOMS) by combining driver and occupant monitoring in one camera. Based on emotion3D’s CABIN EYE AI software stack and ON’s AR0820AT 8.3 MP image sensor, this new DOMS solution allows automotive OEMs to deploy high-performance, low-cost, next-generation in-cabin imaging solutions and provides multiple safety capabilities and a next-level user experience.

ON’s revenues for its fiscal 2021 third quarter, ended October 1, 2021, increased 32.3% year-over-year to $1.74 billion. The company’s non-GAAP gross profit came in at $723.30 million, indicating a 63.9% rise from the year-ago period. Its non-GAAP operating income came in at $427.10 million, up 171% from the prior-year period. ON’s non-GAAP net income came in at $380.30 million for the quarter, representing a 240.2% year-over-year improvement. Its non-GAAP EPS increased 222.2% year-over-year to $0.87. The company had $1.39 billion in cash and cash equivalents as of October 1, 2021.

Analysts expect the company’s EPS to be $2.80 for the fiscal year 2021 ended December 31, 2021, representing a 229.4% rise from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $6.69 billion for the same fiscal year indicates a 27.2% year-over-year improvement. ON’s EPS is expected to grow at a rate of 55.5% per annum over the next five years. The stock gained 107.5% in 2021.

Synaptics Incorporated (SYNA)

SYNA develops and supplies custom-designed semiconductor products and solutions used in mobile computing, communications, PCs, IoT, and other electronic devices worldwide. The company also provides audio input and output System-On-Chips (SoCs), high-definition video and vision SoCs, touch controllers, touchpads, display drivers, and fingerprint sensors.

On January 7, 2022, SYNA launched its S9A0H ASIC TouchPad solution, an integrated hardware/software platform that enables scalability to meet the demand for larger, smarter, and more responsive haptic-enabled touchpads. The S9A0H is a Microsoft Windows and Google Chromebook compatible solution that is the industry’s first to enable NIST SP800-193 compliance and 384-bit encryption for firmware security. SYNA expects this touchpad solution to help address the growing need for stronger cyber resilience in the work-from-anywhere (WFA) era and enhance productivity.

For its fiscal 2022 first quarter, ended September 30, 2021, SYNA’s net revenue increased 13.5% year-over-year to $372.70 million. The company’s non-GAAP gross profit came in at $216 million, representing a 32.4% rise from the prior-year period. Its non-GAAP income from operations came in at $127.60 million for the quarter, up 68.6% from the prior-year period. SYNA’s non-GAAP net income came in at $108.70 million, indicating a 63% increase from the prior-year period. Its non-GAAP EPS increased 44.9% year-over-year to $2.68. The company had $347.30 million in cash and cash equivalents as of September 30, 2021.

The consensus EPS estimate of $11.21 for the fiscal year 2022 ending July 31, 2021, represents a 35.7% rise from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters. For the same fiscal year, analysts expect SYNA’s revenue to improve 18.2% from the prior-year period to $1.58 billion. The company’s EPS is expected to grow at a 15% rate per annum over the next five years. The stock gained 200.3% in 2021.

Lattice Semiconductor Corporation (LSCC)

LSCC develops and sells semiconductor products that offer field-programmable gate arrays that consist of Certus-NX and ECP, MachXO, iCE40, and CrossLink product families. The company licenses its technology portfolio through standard IP and IP core licensing, patent monetization, and IP services. It primarily serves OEMs in the communications and computing, consumer, industrial and automotive end markets and sells its products directly to end customers and indirectly through a network of independent manufacturers' representatives and independent distributors.

On January 5, 2022, LSCC announced that its award-winning Lattice CrossLink-NX FPGAs and AI-optimized software solutions is powering Lenovo’s latest ThinkPad X1 portfolio to deliver advanced user experiences, including immersive engagement, privacy, and collaboration without affecting performance or battery life. The companies are looking forward to providing intelligent, interactive, and elevated computing capabilities to ThinkPad X1 users by enabling new computer vision capabilities with LSCC.

LSCC’s revenue for its fiscal 2021 third quarter ended October 2, 2021, increased 28% year-over-year to $131.91 million. The company’s non-GAAP gross profit came in at $83.88 million, representing a 32.5% year-over-year improvement. Its non-GAAP income from operations came in at $40.08 million, indicating a 46.7% from the prior-year period. While its non-GAAP net income increased 48.8% year-over-year to $39.62 million, its non-GAAP EPS increased 47.4% to $0.28. The company had $181.45 million in cash and equivalents as of October 2, 2021.

Analysts expect the company’s EPS to be $1.02 for the fiscal year 2021 ended December 31, 2021, representing a 47.8% rise from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $507.67 million for the same fiscal year indicates a 24.4% year-over-year improvement. LSCC’s EPS is expected to grow at a rate of 15% per annum over the next five years. Last year, the stock gained 68.2%.

NVDA shares fell $0.59 (-0.21%) in after-hours trading Wednesday. Year-to-date, NVDA has declined -4.80%, versus a -0.83% rise in the benchmark S&P 500 index during the same period.

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.

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