By Sam Boughedda
Evercore ISI analysts raised the firm's price targets on Intel (NASDAQ:INTC) and NVIDIA (NASDAQ:NVDA) in a note to clients on semiconductor stocks Tuesday.
The analysts lifted Nvidia's price target to $320 from $300 per share, with the stock remaining a top pick. INTC's price target was raised to $36 from $30.
They explained that the firm's conviction around a March/April fundamental bottom for Semis has only strengthened, and their focus now turns to the accelerating growth stories into the 2H23/24 timeframe.
"Obviously, all eyes are on financial services contagion/recessionary outlook to this GDP-driven industry, but with the inventory correction likely complete by 2Q we continue to recommend staying Overweight Semis (notwithstanding SOX +23% YTD) with a focus on product cycle- and idiosyncratic-driven stories," the analysts wrote.
They believe visibility is improving amid PC/Smartphone inventory digestion and continued resilience in the Auto/Industrial sectors, while they add that DC/Networking will likely bottom in 2Q23.
"As confidence builds for a 1H23 fundamental bottom, all eyes are now on acceleration into 2H23/2024," the analysts added. "Into the back-half of the year, we believe Compute is primed to lead the recovery – both given the bottoming PC market and strong AI-related demand. We believe that NVDA is the best play here, though INTC is becoming an increasingly interesting tactical long."