I thought NXP Semiconductors (NXPI) was too richly-valued after the last quarter, and the shares have since lagged the broader SOX index, as well as names I liked better including Broadcom (AVGO). While nothing has really gone wrong for NXP, expectations were running high going into this last quarter, and the company’s comparatively modest beat-and-raise just wasn’t quite enough for the Street.
To be clear, NXP hasn’t performed badly – only in the context of the exceptional recent performance of the semiconductor sector is a 20% gain “lagging.” What’s more, NXP is well-leveraged to a coming turnaround in auto production, as well as longer-term drivers like content gains in auto and new opportunities in 5G, IoT, and ultra-wide band (or UWB). Were there to be some sort of stumble not driven by fundamentals, this would definitely be a name to reconsider.
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NXP Semiconductors Has Lagged Slightly, But Is Poised For A Stronger 2021
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