The future of computing is expected to involve the cloud, 5G, artificial intelligence, extensive networks, and supercomputing. Companies like Xilinx are expected to play a significant role in shaping the future of computing. Xilinx is a leader in the field-programmable gate array market. It was estimated to enjoy a 54% market share in 2019, comfortably ahead of second-placed Intel at 32%. It is also one of the reasons why one of the best semiconductor stocks to buy today, AMD, announced its decision in late 2020 to acquire Xilinx. The news of the acquisition hasn’t quite set Xilinx’s stock on fire. But, longer-term investors might want to consider the company if the semiconductor industry is where they wish to invest.
Why Xilinx Is a High-Quality Business
Xilinx is considered to be a best-in-class franchise. It has more than 4800 patents under its name. The company did $3 billion in sales in 2019 and had an operating cash flow of $1.2 billion. Xilinx’s customers make up a staggering 51% of the overall programmable logic market. The company is headquartered in Silicon Valley with offices in major technology hubs in Dublin, Singapore, Hyderabad, Tokyo, Beijing, and Shanghai. The growth opportunities for Xilinx appear bright in sub-markets like wireless, communication infrastructure, data center, aerospace and defense, industrial, healthcare, and automotive. The company has been able to deliver gross margins of 70% and operating margins in the high-20s. If you want to buy the best semiconductor stocks, then Xilinx certainly has to be among the candidates for researching deeper.
Xilinx last traded at $122.25 on the close of day on 19th March 2021. At the time, the stock had a dividend yield of 1.24%. Xilinx’s stock was down 11.87% over the preceding month. However, the stock had gained 62% since the March 2020 market crash. Marvell Technology Group is one of the peers of Xilinx. Its stock closed at $45.55 on 19th March 2021. Marvell was trading at a 0.53% dividend yield and was down 12% over the preceding month. However, the stock was up 141% since the March 2020 market fall.