In a startling turn of events, institutional broker Rosenblatt Securities announced this morning that it is recommending its clients sell Intel (NASDAQ:INTC) stock, and buy Texas Instruments (NASDAQ:TXN) instead.

And that's not all. Announcing a whole slew of new stock "initiations," Rosenblatt urged investors this morning to buy graphics star NVIDIA (NASDAQ:NVDA), flash memory specialist Micron, and semiconductor maker Broadcom, but leave chipmaker Cavium Networks on the shelf. With so many new recommendations to choose from, we're going to limit ourselves today to just a choice handful.

Here are three things you need to know about them.

Semiconductor chip

Image source: Getty Images.

1. Time to sell Intel...

After basking "in the glory days of Moore's" Law for years, Rosenblatt fears that the world has turned more "data centric." As explained in a write-up on StreetInsider.com today, Rosenblatt concedes that Intel has enjoyed a "near 100% share" of the market for x86 server CPUs. What the analyst worries about, though, is that the market today is tilting toward graphics processing units (GPUs) and accelerators, markets where Intel is less dominant.

Accordingly, when Rosenblatt initiated coverage of Intel this morning, it did so with a sell rating.

2. ...and buy graphics specialists instead

Incidentally, when you think GPUs, two names naturally spring to mind: NVIDIA and its archrival in graphics, Advanced Micro Devices (NASDAQ:AMD). It should come as no surprise, therefore, that at the same time as Rosenblatt warns against buying Intel, it's urging investors to buy AMD and NVIDIA instead.

According to the analyst, Intel's losses in x86 will be AMD's gain, as the latter enjoys the "potential" for "share gain" in "x86 server/datacenter" CPUs, and benefits, too, from a market that will favor makers of GPUs for "next generation computing." Similarly, Rosenblatt likes NVIDIA, a stock that the analyst expects to benefit from "secular sustainability in the company's core gaming business," accelerated by "[virtual reality/augmented reality] and eSports as tailwinds." And on top of all that, Rosenblatt sees NVIDIA enjoying "multi-billion dollar green field opportunities (AI, self-driving cars, etc.), combined with the company's unique set of scalable core IP/Software/technologies in GPGPU, deep neural network compute, artificial intelligence, autonomous driving."

When all's said and done, Rosenblatt sees AMD stock gaining 17% as it rises to $16.50 a share over the next year, and NVIDIA surging ahead 26% in the same time frame. Needless to say, Rosenblatt recommends buying them both.

3. The best semiconductor stock of all?

Veering away from the great Intel-AMD debate, though, Rosenblatt's most surprising call of the day is a recommendation to buy shares of Texas Instruments. Initiating with a buy rating and a 12-month price target of $90 a share, Rosenblatt is looking for 17% gain in stock price from Texas Instruments. That's about equal to the 17% expected gain from AMD stock, but less than the 26% profit Rosenblatt hopes to see from NVIDIA.

So why does Rosenblatt love TI? (And why might you?)

The answer goes beyond servers, to focus on Texas Instruments' "dominant position in the analog industry," where Rosenblatt says it enjoys a "high-teens market share" of this $45 billion market. Furthermore, TI is making "consistent share gains," enjoys a "structural manufacturing cost advantage," and is producing "sustainable FCF generation" that makes the stock ideal for "long term and income oriented investment."

Bonus thing: Focus on the cash

According to Rosenblatt, Texas Instruments is using its "long-term structural manufacturing cost advantage [in] 300mm wafers" to deliver "20%- 30% FCF" margins for shareholders. And Rosenblatt is right.

According to data from S&P Global Market Intelligence, Texas Instruments generated positive free cash flow of $4.1 billion on $13.4 billion in revenue last year -- better than a 30% free cash flow margin, and even better than the company's net profit margin of 26.9% (on $3.6 billion in GAAP profits). What's more, "FCF generation is all that matters at TI," exults Rosenblatt, and TI management aims to reward shareholders by returning literally all of its free cash (minus net debt retirement) to shareholders through a combination of payouts of its 2.6% dividend yield and stock repurchases (1.5% shares retired over the past year).

When you add those two numbers (4.1%) to analysts' projected growth rate (10%), what you get is about a 14.1% projected return to shareholders owning Texas Instruments stock -- not far short of TI's price-to-free cash flow ratio of 18.8.

Personally, I still don't think paying 18.8 times FCF for a 14% return is quite cheap enough to make TI a bargain, but apparently Rosenblatt believes it's close enough to justify a buy rating.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of and recommends NVIDIA. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.