As I noted in my January 13 video “4 picks for the chip shortage,” investors are looking at shortage of silicon chips that has hit the auto industry especially hard and that argues for a multi-year increase in capital spending to expand chip production at foundry companies such as Taiwan Semiconductor (TSM). As the world’s largest supplier of semiconductor manufacturing equipment, Applied Materials will see its revenue climb as a result of that capital spending. The company’s equipment can be found at almost every major step in cap manufacturing (with the exception of lithography) from chemical and physical vapor deposition to etching to defect-inspection scanning electron microscopes. The stock is up 60.04% in the last year, as of the close on January 13 with most of that gain coming in the last 3 months where the stock is up 51.9%. The shares are already a pick in my long-term 50 Stocks Portfolio where they’re up 91.8% from December 31, 2017. Today, I’m adding Applied Materials to my Jubak Picks Portfolio.
Today, January 8, Taiwan Semiconductor Manufacturing (TSM), the worlds largest contract chipmaker, reported December sales that translate into record quarterly revenue with estimated sales in the quarter climbing to $12.9 billion (361.5 NT$). (The company reports its quarter on January 14.) The projections based on December revenue amount to a 25% increase in revenue in 2020 from 2019.
“While Corning (GLW) shares have rallied, we believe that a ‘stronger for longer’ consumer trend augurs well for underlying demand drivers in Corning’s business segments exposed to consumer electronics, with further tightening in the glass supply demand environment due to outages at a major competitor,” wrote Citigroup analyst Jim Suva in a note to clients last week.There’s a shortage of the high-tech glass used in video displays, mobile phones, and cars. One reason is a power outage that damaged manufacturing equipment at a Japanese factory of Corning rival Nippon Electric Glass. But another reason is a pick up in demand for consumer electronics products.
Democratic and Republican attorney’s general from 38 states, led by Colorado and Nebraska, have filed an antitrust lawsuit against Google (GOOG). The suit alleges that Alphabet manipulates its search results to give its own products and services greater rankings over rivals—depriving web users from seeing the best options whenever they query the web for shopping, dining, and travel