Xilinx

[Anna Williams]

Hi, can you share your thoughts on the short-term outlook for the Xilinx stock price?

Edited May 7, 2020 by Anna Williams

[James Byrnes]

Hi Anna, and thanks for posting this question. Xilinx stock is one of the hottest stocks out there currently. The company produces chips that are seen as an integral part of the 5G infrastructure.

 

Governments and private companies are spending billions around the globe in a race to build a robust 5G infrastructure. Hence, Xilinx is attracting a lot of inverters' attention and this is why the stock is holding up really well. 

 

In a major win recently, Xilinx has been awarded a big contract by Samsung to help the South Korean giant with worldwide 5G commercial deployments. As a result, Samsung will be using Xilinx’s Versal adaptive compute acceleration platform (ACAP).

 

In the meantime, Xilinx stock price has gained more than 30% since in the last months as a part of the booming 5G stock sector. Technically, there is room for a move towards $115.

 

[Emilio Estavez]

Hello Anna,

Xilinx (NASDAQ: XLNX) has made an impressive run in the last three months following the sharp market's recovery from the coronavirus-related hit in February and March. However, investors should proceed with caution due to the fact that Xilinx has been struggling even before the Covid-19 epidemic. 

The semiconductor manufacturing company generated most of its 2019 revenue on 5G wireless deployments, however, it started to lose momentum towards the end of the year. Xilinx took a big blow from the coronavirus crisis and that was clearly reflected in the company’s fiscal Q4 results in April. However, one part of the company’s operations kept going even during the crisis, providing investors with some optimism regarding the stock.

Xilinx’s data center business plays a minor role on an overall basis as it covered only 10% of Xilinx’s Q4 total revenue of $756 million. However, the data center revenue gained an outstanding 77% compared to the same period last year, thanks to an increase in demand from cloud and powerful computing services. 

The data center sector accounted for only 5% of Xilinx’s Q4 2019 revenue. The influence that this segment made on a general basis is now much higher so it shouldn’t surprise us if we see even bigger revenues from the data center operations in the future, given that demand for data center accelerators and other solutions this segment offers could keep increasing. 

The data center segment is still in its initial stages of development, as it can be seen in fiscal reports. Still, the segment has a huge potential and could provide the company with a huge boost in the future with its high-performance solutions such as the field-programmable gate arrays (FPGAs).
 

[Mason Ward]

Hi Anna, thanks for coming here.

Shares of Xilinx are currently hovering around $95 and analysts believe that the stock of the semiconductor manufacturer has attained its near-term potential in spite of climbing 38% since the March low. 

Shares of Xilinx climbed from $69 to $95 since hitting the bottom recently compared to the S&P which advanced around 40%. While declining, Xilinx’s shares dropped about 24% from $91 to $69, somewhat lower than the S&P 500, which dropped by around 34%. The company’s stock rose by about 14% compared to 2019 levels.

The stock has risen above the level it was at prior to the fall in February due to the Covid-19 crisis. As a result, the stock has probably fulfilled its potential, with demand and revenues looking to be lower than in 2019.