Semiconductor stocks moving on news Monday included Arm Holdings, Micron Technology and Taiwan Semiconductor Manufacturing.
Arm and Micron received price-target hikes from an investment bank, while TSMC scored U.S. government funding to build domestic chip factories.
KeyBanc Capital Markets analyst John Vinh raised his price targets on buy-rated Arm and Micron, citing improved outlooks for both.
"We continue to see increasing traction and proliferation of Arm across the semiconductor ecosystem," Vinh said in a client note. The chip designer is gaining ground in the data center market and in personal computers, he said.
Nvidia's Grace CPU Superchips should meaningfully boost adoption of Arm central processing units in data centers, Vinh said.
Plus, computer makers such as Lenovo are upbeat about prospects for Arm-based PCs, he said.
Semiconductor Stocks Get Price-Target Hikes
Vinh reiterated his overweight rating on Arm stock and raised his price target to 135 from 120.
On the stock market today, Arm stock climbed 3.6% to close at 129.25.
Elsewhere among semiconductor stocks, Vinh maintained his overweight rating on Micron stock and upped his price target to 150 from 135. Micron stock rose as much as 5% in intraday trading Monday. But it ended the regular session down 0.5% to 122.95.
Micron's HBM3e products for high-bandwidth memory applications are superior to those from rival SK Hynix, Vinh said. Sales of Micron's HBM products should benefit from the rollout of Nvidia's latest data center AI processors, he said.
"As investors increasingly will recognize how strong Micron's position is in HBM, we expect the stock to rerate and be given credit as an AI play," Vinh said.
He also raised his price target on Nvidia stock to 1,200 from 1,100 and kept his overweight rating. However, Nvidia stock dipped 1% to 871.33 on Monday.
Among other semiconductor stocks in his coverage area, Vinh said he is incrementally more positive on buy-rated Monolithic Power Systems and Qualcomm. But he downgraded Skyworks Solutions to sector weight, or neutral, from overweight, citing a mature smartphone market.
TSMC Nabs U.S. Government Handout
Meanwhile, TSMC shares advanced 1% to 142.79 after the U.S. Commerce Department announced funding for the contract chipmaker's U.S. factories.
The Commerce Department awarded TSMC $6.6 billion in grants and as much as $5 billion in loans to help the chipmaker build factories in Arizona. The funding is from the 2022 U.S. Chips and Science Act.
In other news impacting semiconductor stocks, Deutsche Bank reinstated coverage of Broadcom with a buy rating and a price target of 1,500. But Broadcom stock slid 0.3% to 1,336.10 on Monday.
In a client note, Deutsche analyst Ross Seymore said he sees several positive catalysts for Broadcom. They include its exposure to the artificial intelligence market with custom processors and connectivity chips. Plus, the company is starting to see benefits from its acquisition of VMware, he said.
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