On Sep 25, Zacks Investment Research upgraded leading microcontroller and touch solutions provider Atmel Corporation (ATML) to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell) largely due to its wireless portfolio extension to address key markets. The stock is currently trading at a forward P/E of 31.8x and has long-term earnings growth expectation of 17.5%.
Why the Upgrade?
Atmel recently introduced two new turn-key system-on-chips (SoCs) and four new modules featuring these SoCs. The WILC1000 and WINC1500 SoCs enable Atmel to offer compatible solutions for battery-powered Internet of Things (IoT) applications to capitalize on this huge market potential.
The new SoCs can be connected to any Atmel AVR (Advanced Virtual RISC) or Atmel SMART MCUs (microcontrollers). These add-on solutions enable device manufacturers to connect to a wide range of IoT, consumer and industrial applications without compromising on cost or performance. In addition, these products allow OEMs (original equipment manufacturers) and small developers to streamline the production of IoT devices that are smaller, easier to use, faster and more powerful with low power consumption and optimized battery performance.
According to data by research agency International Data Corporation, the global IoT market is likely to expand manifold to $7.1 trillion by 2020, as more and more people develop an affinity for full-time connectivity. The worldwide IoT installed base is expected to have a compound annual growth rate of 17.5% from 2013 to 2020 with a wide proliferation across the full breadth of the IoT ecosystem, including intelligent and embedded systems shipments, connectivity services, infrastructure, purpose-built IoT platforms, applications, security, analytics, and professional services.
Atmel continues to make large investments to tap the IoT market, which is expected to be one of the largest growth opportunities for the semiconductor industry over the next several years. We remain impressed with such product innovations and inherent growth opportunities for Atmel.
Other Stocks to Consider
Some other stocks that look promising in the industry include Ambarella, Inc. (AMBA), Avago Technologies Limited (AVGO) and Pericom Semiconductor Corp. (PSEM), each carrying a Zacks Rank #1 (Strong Buy).
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