Semiconductor stocks have started recovering after a significant hit in recent weeks due to the war in Ukraine. To better play this recovery, Bespoke’s Paul Hickey recommends increasing exposure to Qualcomm Inc (NASDAQ: QCOM) and Broadcom Inc (NASDAQ: AVGO).
Why does he like QCOM and AVGO?
Despite a 10% rebound each in recent days, both stocks are still down significantly from their respective highs in January. On CNBC’s “The Exchange”, Hickey said:
Qualcomm and Broadcom are not the highest growth semiconductor names. But they pay pretty good dividends. So, they’re somewhat insulated from a major swing. The dividends are also pretty safe for these companies. They have earnings to support the dividends.
Earlier this month, Broadcom reported better-than-expected results for its fiscal first quarter and offered upbeat guidance for the future.
Hickey remains constructive on tech
The tech sector at large has had a poor start to the year, but Hickey remains confident that these stocks will recover later in the year. He noted:
We had one of the worst starts to the year for the U.S. equity market in history, and we had one of the worst starts for technology. Historically, when you see those in the first two and a half months of the year, forward returns have been better.
A day earlier, Wedbush Securities’ Dan Ives also said it was the right time to own the tech stocks.
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