QQQ   436.57 (-0.24%)
AAPL   181.22 (-0.77%)
MSFT   407.46 (+0.00%)
META   486.87 (-0.04%)
GOOGL   136.02 (-2.06%)
AMZN   173.72 (+0.10%)
TSLA   204.31 (+2.29%)
NVDA   787.20 (+0.02%)
NIO   5.52 (-4.50%)
AMD   176.17 (-1.03%)
BABA   75.37 (-2.97%)
T   17.01 (+1.07%)
F   12.29 (+2.42%)
MU   89.75 (-2.29%)
CGC   3.50 (-0.85%)
GE   155.12 (+0.73%)
DIS   110.78 (+1.24%)
AMC   5.03 (+4.57%)
PFE   27.10 (+0.78%)
PYPL   60.85 (+1.15%)
XOM   104.36 (+0.32%)
QQQ   436.57 (-0.24%)
AAPL   181.22 (-0.77%)
MSFT   407.46 (+0.00%)
META   486.87 (-0.04%)
GOOGL   136.02 (-2.06%)
AMZN   173.72 (+0.10%)
TSLA   204.31 (+2.29%)
NVDA   787.20 (+0.02%)
NIO   5.52 (-4.50%)
AMD   176.17 (-1.03%)
BABA   75.37 (-2.97%)
T   17.01 (+1.07%)
F   12.29 (+2.42%)
MU   89.75 (-2.29%)
CGC   3.50 (-0.85%)
GE   155.12 (+0.73%)
DIS   110.78 (+1.24%)
AMC   5.03 (+4.57%)
PFE   27.10 (+0.78%)
PYPL   60.85 (+1.15%)
XOM   104.36 (+0.32%)
QQQ   436.57 (-0.24%)
AAPL   181.22 (-0.77%)
MSFT   407.46 (+0.00%)
META   486.87 (-0.04%)
GOOGL   136.02 (-2.06%)
AMZN   173.72 (+0.10%)
TSLA   204.31 (+2.29%)
NVDA   787.20 (+0.02%)
NIO   5.52 (-4.50%)
AMD   176.17 (-1.03%)
BABA   75.37 (-2.97%)
T   17.01 (+1.07%)
F   12.29 (+2.42%)
MU   89.75 (-2.29%)
CGC   3.50 (-0.85%)
GE   155.12 (+0.73%)
DIS   110.78 (+1.24%)
AMC   5.03 (+4.57%)
PFE   27.10 (+0.78%)
PYPL   60.85 (+1.15%)
XOM   104.36 (+0.32%)
QQQ   436.57 (-0.24%)
AAPL   181.22 (-0.77%)
MSFT   407.46 (+0.00%)
META   486.87 (-0.04%)
GOOGL   136.02 (-2.06%)
AMZN   173.72 (+0.10%)
TSLA   204.31 (+2.29%)
NVDA   787.20 (+0.02%)
NIO   5.52 (-4.50%)
AMD   176.17 (-1.03%)
BABA   75.37 (-2.97%)
T   17.01 (+1.07%)
F   12.29 (+2.42%)
MU   89.75 (-2.29%)
CGC   3.50 (-0.85%)
GE   155.12 (+0.73%)
DIS   110.78 (+1.24%)
AMC   5.03 (+4.57%)
PFE   27.10 (+0.78%)
PYPL   60.85 (+1.15%)
XOM   104.36 (+0.32%)

5G Buying Opportunity Appears in NXP Semiconductors

As most stocks across the market took a hammering on Monday in the face of growing concerns about the coronavirus epidemic, the astute investor would have picked up on the buying opportunity emerging in the shares of NXP Semiconductors (NASDAQ: NXPI). In recent years the company has made a concerted effort to pivot towards the 5G market and its efforts are clearly yielding results. Since the start of 2019, they had tacked on over 100% in value through the start of this month and were trading at all-time highs.

On the 3rd of February this year, the company released its Q4 earnings which topped analyst expectations even though revenue contracted year on year. Management were confident that this was only a minor hiccup as they also raised forward guidance and Wall Street was only too happy to keep the buying spree going. Excitement is growing for the launch of 5G and NXP appears to be in favor as a semiconductor company well-positioned to capture the expected growth. This week alone, we’ve seen smartphone makers HTC and Sony announce their 5G models will be available in 2020, while Verizon has said that it will double the number of cities with its 5G service this year.

NXP’s CEO, Richard Clemmer, said with this month’s earnings release that they “delivered full-year revenue of $8.88 billion, a decline of 6 percent year-on-year, against a very challenging semiconductor industry backdrop. As we look forward to 2020, we are increasingly confident that the demand trends within our end markets are beginning to moderately improve.  Notwithstanding the operating environment we experienced in 2019, NXP drove improved profitability, strong free cash flow generation, and continued to successfully execute our strategy within our target markets.” Positive words indeed.

Ahead of the Pack

The confidence that management had to raise guidance was preceded by the likes of Bank of America boosting their price target for the stock in December with a bullish Buy rating.


Even compared to the other big names that are arguably more well known in the 5G game, Qualcomm (NASDAQ: QCOM) and Intel (NASDAQ: INTC), NXP has been the standout performer since it IPO’d in 2010. Its shares are up nearly 800% in less than a decade while Intel’s are up 200% and Qualcomm’s are up 115%.

The dip that NXP’s stock saw on Monday wasn’t company-specific and simply more of risk-off sentiment across the wider market. Both Intel and Qualcomm took a hefty haircut during the session while Apple (NASDAQ: AAPL) also caught some heat as reports came through of their Chinese based manufacturers and factories being shut indefinitely as authorities struggle to contain the outbreak.

Getting Involved

Investors looking to make a 5G trade would do well to add NXP to their watchlist. From a technical standpoint, Monday’s drop brings shares down towards a rising support trend that’s been in play since the start of this rally in December 2018. In times of general market weakness that pulls down individual names, these kinds of opportunities can pop up as ideal entry points. As a bonus, when we look at the daily chart we can see that the RSI is close to 30 having been almost 80 less than a month ago. This is a serious swing without any NXP centric news and suggests that the sell-off is becoming overdone.

Assuming the coronavirus doesn’t reach pandemic proportions, then stocks with solid fundamentals and impressive internal momentum stand poised to bounce back the hardest as the virus retreats. NXP has the look and the feel of one of those and investors would do well to keep an eye on it.

5G Buying Opportunity Appears in NXP Semiconductors
→ Detecting Cancer in Mere Seconds: Early Investment Opportunity (From Vita Imaging) (Ad)

Where should you invest $1,000 right now?

Before you make your next trade, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

Beginners Guide To Retirement Stocks Cover

Click the link below and we'll send you MarketBeat's list of seven best retirement stocks and why they should be in your portfolio.

Get This Free Report
Sam Quirke

About Sam Quirke

  • s.quirke.us@gmail.com

Contributing Author

Technical Analysis

Experience

Sam Quirke has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical and fundamental analysis, tech stocks, large caps, timing entries and exits

Education

Trinity College, Dublin, Ireland

Past Experience

Professional futures trader, start-up fund manager


Featured Articles and Offers

Search Headlines: