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Qualcomm, AMD get a boost from HSBC, but the Club remains cautious on chip stocks

Published Mon, Oct 24 20222:50 PM EDT

Paulina Likos @paulina_likos

Zev Fima @zevfima

Semiconductor stocks have been beaten down this year, but HSBC still sees some upside for Club holdings Qualcomm (QCOM) and Advanced Micro Devices (AMD). We're still holding limited shares of the chipmakers on a similar rationale, but remain cautious of semiconductor stocks amid new U.S. export controls blocking chips to China and broader demand weakness for consumer electronics. Analysts at HSBC on Monday initiated coverage on Qualcomm, with a buy rating and $180 price target. The bank also began coverage of AMD, with a hold rating and price target of $60. Shares of Qualcomm were down 0.23%, at $115.47 a share, while shares of AMD were down more than 1%, at $58.18 a share, in midday trading. The semiconductor industry as a whole is down more than 40% year-to-date. HSBC's take Qualcomm is known for making chips used in smartphones, a market under pressure. But HSBC said the company has set itself up for success beyond mobile devices. The analysts argued Qualcomm is well-positioned for growth because of its diversified revenue streams, aided by its automotive and internet of things pipelines — a view the Club shares. "The company is well-positioned for growth in a post-smartphone world thanks to its dominant position in supplying chips to autos, its technology strength in radio frequency front end chips, and its penetration of Internet of Things devices," the analysts wrote a research note. Meanwhile, in a separate note, HSBC said it expects continu