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With a market cap of $55.4 billion, Eindhoven, the Netherlands-based NXP Semiconductors N.V. (NXPI) is a global leader in high-performance mixed-signal and standard semiconductor solutions. Renowned for its automotive solutions, NXP is at the forefront of advanced driver assistance systems and autonomous vehicle technologies, including connectivity, powertrain, and infotainment.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and NXP Semiconductors fits this criterion perfectly. NXP leads in mobile payments with its mWallet 2GO platform and offers a comprehensive portfolio of microcontrollers, application processors, connectivity solutions, and sensors for a wide range of applications.
However, the chipmaker has dipped 26.4% from its 52-week high of $296.08, reached on Jul. 17. Over the past three months, shares of NXPI have declined 3.2%, which lags behind the Technology Select Sector SPDR Fund's (XLK) rise of 12.2% during the same period.
In the longer term, NXPI has dipped 5.1% on a YTD basis, underperforming XLK’s 22.6% gain. Moreover, shares of NXP Semiconductors have gained 1.1% over the past 52 weeks, compared to XLK’s 26.4% gain over the same time frame.
But, despite few fluctuations, NXPI stock has been trading above its 50-day moving average since mid-July and stayed above its 200-day moving average since September.
Despite reporting better-than-expected Q3 adjusted EPS of $3.45 on Nov. 4, shares of NXPI dropped 5.2% the next day due to disappointing Q4 guidance, with projected revenues of $3 billion to $3.2 billion and adjusted EPS of $2.93 to $3.33, well below consensus estimates. The company pointed to a significant decline in demand within the industrial and IoT markets, exacerbated by broader macroeconomic weakness in Europe and the Americas. Additionally, the outlook reflected ongoing caution from businesses cutting spending amid budget constraints, raising concerns about NXPI's near-term growth prospects.
However, in comparison with its rival, Microchip Technology Incorporated (MCHP) has lagged behind NXPI, with a dip of 31.3% on a YTD basis and 28.1% decrease over the past 52 weeks.
Despite the stock’s underperformance relative to the broader sector, analysts are moderately optimistic about its prospects. NXPI has a consensus rating of “Moderate Buy” from the 27 analysts covering the stock, and it is currently trading below the mean price target of $263.81.
