4 Goldman Sachs Buy-Rated Analog/RF Chip Dividend Stocks Are Perfect Picks Now

Goldman Sachs is the acknowledged leader in the investment landscape on Wall Street and worldwide. The firm’s top-notch research department continues to provide institutional and high-net-worth clients with the best ideas across the investment spectrum. It is likely to continue doing so for years. Additionally, it gives advice, investment, and execution services to institutions and individuals across public and private markets. At 24/7 Wall St., we have followed the company’s research for 15 years to bring our readers its top stock ideas. Last month, the firm initiated coverage on Analog/RF Semiconductor stocks, and four of the industry’s giants received a Buy rating, along with strong target prices.

With the massive surge in semiconductor demand over the past two years, driven by enormous demand for artificial intelligence and cloud computing capabilities, one of the best values in the technology sector may lie in the Analog/RF Semiconductor segment. The Goldman Sachs team made this statement when initiating its coverage of the industry:

The analog semiconductor industry is in a state of deep cyclical correction. The “mother of all analog upturns” began during the COVID-19 pandemic, driven by a combination of acute supply shortages and heightened demand for all capital goods, most notably electric vehicles. The rationale for this upturn (“just in case” supply chains and re-shoring of manufacturing) drove inventory levels higher, thus exacerbating the current downturn. Many of what were believed to be structural industry changes have fallen under the weight of cost pressures, but others (strategic onshoring) remain priorities today. The analog industry is likely to move toward trendline shipments over the next 12-18 months, and we are most bullish on those shipping furthest below trend and/or those that have managed their supply chains particularly well.

The Goldman Sachs team initiated coverage on six stocks, and we were particularly interested in the Buy-rated ones, four of which pay dividends and are long-time stalwarts of the sector. All four options make sense for growth stock investors seeking a technology angle that is really a value play now.

Why we recommend Goldman Sachs stocks

Founded in 1869, Goldman Sachs is the world’s second-largest investment bank by revenue and is ranked 55th on the Fortune 500 list of the largest U.S. corporations by total revenue. The Wall Street white-glove giant offers financing, advisory services, risk distribution, and hedging for the firm’s institutional and corporate clients. With top-notch research from some of the top-ranked analysts on Wall Street, the company is an incredible source for some of the best investment ideas.

Analog Devices

One of the “old-school” semiconductor stocks that we have covered for years is a more conservative way to play the group. Analog Devices Inc. (NASDAQ: ADI) is a global semiconductor company.

The company designs, manufactures, tests, and markets a portfolio of solutions, including integrated circuits (ICs), software, and subsystems that leverage high-performance analog, mixed-signal, and digital signal processing technologies.

Its comprehensive product portfolio, domain specialization, and manufacturing capabilities extend across high-performance precision and high-speed mixed-signal, power management, and processing technologies, including:

• Data converters
• Amplifiers
• Power management
• Radio frequency (RF) ICs
• Edge processors
• Other sensors

The company’s IC product portfolio includes both general-purpose products used by a range of customers and applications, as well as application-specific products designed for specific target markets.

Its analog ICs monitor, condition, amplify, or transform continuous analog signals associated with physical properties, such as temperature, pressure, weight, light, sound, or motion.

The Goldman Sachs target price for the company is $285.

Microchip Technology

Based in Arizona, this stock has significant upside potential compared to the Goldman Sachs target price. Microchip Technology Inc. (NASDAQ: MCHP) develops, manufactures, and sells smart, connected, and secure embedded control solutions used by its customers for a variety of applications.

The company’s solutions serve approximately 123,000 customers across these markets:

• Industrial
• Automotive
• Consumer
• Aerospace and defense
• Communications
• Computing

The company’s semiconductor products segment designs, develops, manufactures, and markets:

• Mixed-signal microcontrollers
• Development tools and analog
• Interface
• Mixed-signal
• Timing
• Wired and wireless connectivity devices
• Memory products

Microchip Technology also offers a comprehensive set of low-cost and easy-to-learn application development tools.

Its manufacturing operations include wafer fabrication, wafer probing, assembly, and testing.

The technology licensing segment encompasses the sale and licensing of the company’s intellectual property. It markets and sells its products worldwide primarily through a network of direct sales personnel and distributors.

Goldman Sachs has a target price of $88 for the shares.

NXP Semiconductors

Located in the Netherlands, as of the end of last year, this company is the third-largest European semiconductor company by market capitalization. NXP Semiconductors N.V. (NASDAQ: NXPI) is primarily engaged in the semiconductor industry. The company, through its subsidiaries, focuses on the design, development, and manufacturing of semiconductor products used in a wide range of applications across:

• Automotive
• Industrial
• Mobile
• Communication infrastructure markets

NXP Semiconductors discloses its revenue by end markets.

Automotive encompasses products for vehicle control, safety, infotainment, and electrification.

Industrial & Internet of Things (IoT) covers applications in smart homes, smart cities, and industrial automation.

The company has one reportable segment that represents the entity as a whole, reflecting the operating decisions and allocation of resources of the company.

The Goldman Sachs price objective is $276.

Texas Instruments

This legacy technology giant offers a solid dividend and a great way to play the AI explosion. Texas Instruments Inc. (NASDAQ: TXN) designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States and internationally.

The company operates through two segments: Analog and Embedded Processing.

The Analog segment offers power products to manage power requirements across various voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage references, and lighting products.

This segment offers signal chain products that sense, condition, and measure signals, enabling the transfer or conversion of information for further processing and control. These products include amplifiers, data converters, interface products, motor drives, clocks, and logic and sensing products.

Texas Instruments also provides AI-focused chips and solutions. The company offers the Sitara AM62 processors that power AI applications.

The Embedded Processing segment provides microcontrollers for electronic equipment, digital signal processors for mathematical computations, and application processors for specialized computing tasks.

This segment provides products for use in various markets, such as:

• Industrial
• Automotive
• Personal electronics
• Communications equipment
• Enterprise systems
• Calculators

It also provides DLP products primarily for projecting high-definition images, as well as calculators and application-specific integrated circuits.

Goldman Sachs has a target price of $255 for the stock.

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