RBC Says Memory Semiconductor Stocks Could Be the Big Q3 Earnings Winners

For years, the semiconductor stocks exploded higher, and investors were enjoying one of the best rides in the industry’s history. Driven by everything from bitcoin mining to video games, data center growth and so much more, some of the stocks surged in value.

Just over three years ago Nvidia Corp. (NASDAQ: NVDA) was a $20 stock. It made a gigantic move to almost $300 this time last year. Like all good things though, the huge run has come to an end, at least for now.

There are some bright pockets for investors to consider, and a new RBC report focuses in on the top memory chip stocks as possible winners when third-quarter earnings are reported next month. The analysts said this in the report:

For the first time this year we think we’re entering an earnings quarter where expectations are for some companies to report upside. Over the past 12 months we’ve seen muted expectations and this appears to be shifting where we think neutral to up is more likely for a number of companies. Memory is the most likely candidate to see estimate revisions upward along with some data-center-exposed companies. Specifically, we think memory stocks are expected to see upside, while data-center-exposed names are expected to be “in-line” this compares to three quarters straight of muted expectations (for flat to down) heading into earnings.

Three stocks are rated Outperform at RBC, and all make sense for aggressive accounts looking to own the shares before third-quarter earnings come in. That said, one has just reported earnings (see below) and its guidance may have some impact on these estimates.

Cadence Design

This company has remained very resilient and the stock has surged since the lows put in last year. Cadence Design Systems Inc. (NASDAQ: CDNS) engages in the design and development of integrated circuits and electronic devices. Its products include electronic design automation, software, emulation hardware and intellectual property, commonly referred to…

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