In today’s “Expert Spotlight,” we will look at Hans Mosesmann, Managing Director of Rosenblatt Securities and an expert in the semiconductor sector. Mosesmann has deep experience covering semiconductor stocks at various renowned Wall Street firms and has also worked as an electrical engineer for big U.S. chipmakers for nearly a decade.
The earnings season is ripe with mixed results across sectors ranging from banks to retailers to technology companies. Semiconductor companies, in particular, have witnessed a rather confusing quarter. One company’s loss has become another’s gain in the chip space. With the demand for personal computers (PCs) dying down in the first half of 2022, these companies registered a slump in demand for related offerings.
Nonetheless, analysts remain optimistic about the long-term trajectory of these companies, especially with the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act having passed. Some of these companies are poised for even higher growth potential.
Monolithic Power Systems (MPWR)Monolithic Power Systems is a semiconductor company offering power modules, class-d audio, ultrasound multiplexers, automotive, LED lighting and illumination, precision analog, and motor drivers. MPWR stock has gained 6.7% so far this year.
On August 1, MPWR posted a solid second-quarter beat. Adjusted earnings of $3.25 per share outpaced analyst estimates by 31 cents. Moreover, revenue of $461 million (up 57.2% year-over-year) beat the consensus estimates by $30.41 million. Furthermore, the company expects Q3 revenue to be around $490 million, above the consensus of $458.8 million.
Mosesmann has a Buy rating and a $620 (17.8% upside potential) price target on MPWR stock. The five-star analyst is impressed by MPWR’s Q2 results and increased his model estimates to incorporate the bullish outlook from management, which he believes is the result of a “multitude of new greenfield socket wins transition or inflect in the market primarily in Storage/Compute and Automotive.”
The analyst continues to see a strong growth trajectory and market share gains for MPWR, especially with structurally low costs of 300mm manufacturing and a scale that competitors in the power analog space may not be able to match.
Overall, with nine Buys and one Hold, MPWR stock has a Strong Buy consensus rating. The average Monolithic Power Systems price forecast of $566.90 implies 7.8% upside potential to current levels.
Notably, Mosesmann has held consistent Buy recommendations on MPWR stock since 2020. He boasts a success rate of 83% with a generous average return per stock of 41.82%.
Advanced Micro Devices (AMD)Chip giant Advanced Micro Devices is one of Mosesmann's favorite stocks. On August 2, AMD posted second-quarter results that beat the consensus on both the top and bottom lines. However, a weaker-than-expected third quarter guide pulled down the stock. AMD stock has lost 34.7% so far this year.
Mosesmann has a Buy rating on AMD with a price target of $200, which implies a whopping 103.9% upside potential to current levels.
The analyst noted that the total addressable market (TAM) for personal computers (PCs) is now expected to be down by 15% for AMD, with lower exposure to the low-end market. Mosesmann was impressed by AMD’s Datacenter performance and a huge inventory supply coming in 2023, putting behind the supply chain issues.
Mosesmann noted, “We like the setup going forward. On potential weakness on macro-PC issues today we would back up the truck as a planetary alignment never seen in Silicon Valley is approaching the x86 world. AMD’s Datacenter business is set to be larger than Intel’s (INTC) in our opinion in the next couple of years.”
Nonetheless, other analysts on the Street are cautiously optimistic about AMD stock, with a Moderate Buy consensus rating based on 19 Buys, eight Holds, and one Sell. The average Advanced Micro Devices price forecast of $123 implies 25.4% upside potential to current levels.
Remarkably, Mosesmann has been highly bullish on AMD stock since 2019. He boasts a success rate of 79% with a massive average return per stock of 61.49%.
Final ThoughtsAccording to TipRanks’ Star Ranking System, Mosesmann ranks #16 among all 7,991 analysts tracked on TipRanks and #26 among the 21,223 overall experts in the TipRanks universe.
Remarkably, Mosesmann has had an overall success rate of 69% with an average return of 31.40% over the past year. Moreover, during the same period, his calls generated an alpha of 22% and 15.50% over the S&P 500 (SPX) and the benchmark, respectively.
With such massive experience in the semiconductor space and considering his impeccable track record, investors may choose to follow his investment choices in the space to earn reasonable returns.