In today’s world, the markets cannot be separated from politics. Case in point – the semiconductor subsidy bill currently before Congress. The bill, which holds the promise of some $52 billion worth of subsidies for the US semiconductor industry, was stalled in the Congressional processes for several months but last week got a boost from House Speaker Nancy Pelosi. In a move not sees as particularly coincidental, Pelosi’s husband just last month exercised a call option to purchase more than $5 million worth of shares in Nvidia, a major chip maker.
Forget the appearances for a moment, no matter how bad that looks. The semiconductor chip bill has bipartisan support, and while it’s path through the Senate is rocky, it’s expected to pass – and that will mean an infusion of cash into the US semiconductor industry. While the chip segment is hurting now, $52 billion will open a lot of opportunities, up and down the semiconductor supply chain, and investors should be on the lookout accordingly.
Against this backdrop, we’ve used the TipRanks database to locate two semiconductor stocks that stand to gain from political chip subsidies. Both are Strong Buy options with plenty of upside potential, according to the analyst community. Let’s take a closer look.
Marvell Technology (MRVL)
First up on the list is Marvell, one of the chip industry’s light heavyweights. Even after the stock has fallen 45% year-to-date, the company still boasts a market cap of more than $40 billion, and brought in $4.46 billion in revenues in its last fiscal year. Marvell produces chips and chipsets for a wide range of applications, including automotive systems, data centers, ethernet networks, storage accelerators, and SSD controllers.
On the subject of new products, Marvell recently announced the introduction of a generation of ethernet switches, the most advanced secure managed switch for automotive applications.
Heading into this year, Marvell was in a solid position regarding revenues and earnings. The company’s fiscal 2022 revenue was solid, and both the top and bottom lines were…