Xilinx (NASDAQ: XLNX) is a semiconductor company that has stayed competitive and thrived in this rough-and-tumble sector since 1984.
That’s a long time to remain a player in such a dynamic space, especially with big players ready to snap you up or destroy you at any opportunity. It’s a testament to the company’s leadership and vision that it has been able not only to survive but compete.
Today, its client list hosts many big names in a variety of industries.
XLNX started the year strong and nearly doubled its July 2018 price by May. But then the next round of the Chinese trade war happened. That took tech stocks down sharply.
Wall Street doesn’t like uncertainty. Not knowing they could sell chips to Chinese firms like Huawei and others created a lot of uncertainty. What’s more, these are growth stocks. When one of the largest markets in the world is taken off your business list, it has significant implications.
Planning around something like that is difficult. It’s like rigging a ship for a hurricane but not knowing if the storm is going to be a glancing blow or a direct hit. Your contingency plans will slow you down regardless of the outcome.
So, the market adjusted its expectations. And by June, it looked to be clear sailing, at least for a little while, as the Trump administration allowed some chip sales to China and both countries went back to the negotiating table.
That doesn’t mean there’s no threat, but the sector is back under full sail.
XLNX Stock Back on Path of Growth
For XLNX in particular, this has helped revive its performance. In the past year, the XLNX stock is up 86%; year-to-date the stock is up 50%. What’s more, the trailing PE on the stock is sitting around 36, so it’s not even fully valued here, giving it plenty of headroom.
And given the fact that it could be back on its growth path soon, that growth could come fast, especially as other sectors begin to tire in this environment.
Moving forward, XLNX is a key player in very high-growth, strategically oriented sectors.
In telecom, XLNX is key supplier Apple (AAPL) and there is a lot of buzz that its new generation of iPhones may revive its tiring line.
In the data center world – cloud computing, big data, data warehouses, etc. – its strength with Hewlett Packard (HPQ), HP Enterprise (HPE) and Cisco Systems (CSCO) means it will be at the center of this massive and ongoing trend. This potential market is supposed to triple in the next three years or so.
It’s also a big player in the smart car space, with chip designs focused on driver assist systems. The concept is more complex than it sounds. But suffice it to say that in a connected world where XLNX chips are in the cars and in data centers, the leverage will be a compelling selling point to major smart car infrastructure firms.
XLNX stock gets an A rating from my Portfolio Grader.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.