The company’s product lineup extends beyond CPUs, including chipsets, integrated graphics, memory and networking hardware, catering to various computing needs from consumer electronics to enterprise servers. Micron’s strategic approach to research and development, combined with its stash investing review overview global manufacturing footprint, enables the company to maintain a competitive edge in the fast-paced semiconductor industry. Through collaborations with industry partners and a commitment to sustainability, Micron aims to address the growing demand for high-quality memory solutions while minimizing its environmental impact. The company’s stock valuation reflects its current earnings and potential for future growth, particularly as Intel pivots towards burgeoning market segments. While the stock may trade at multiples that consider its challenges, Intel’s comprehensive strategy to address market demands and solid financial foundation suggest that it could offer substantial upside potential. Nvidia’s competitive advantage lies in its comprehensive ecosystem, which includes hardware, software and platforms that accelerate AI and machine learning development.
I also provide my 10 top semiconductor stocks in my million-dollar plus growth stock portfolio, including concentration, number of shares and cost basis. Nvidia’s (NVDA) blowout first-quarter earnings report solidified its leadership position among the best semiconductor stocks. In artificial intelligence (AI) chips, there is Nvidia and then there is everyone else.
The company’s role is crucial in the global supply chain, enabling the design and production of cutting-edge semiconductor products without companies needing to own and operate costly fabrication facilities. Advanced Micro Devices is regarded as one of the premier semiconductor stocks for 2024, benefiting from a confluence of industry trends and strategic positioning. AMD is well-poised to capitalize on the surge in demand for high-performance computing, gaming and data center technologies. The company has made significant inroads into these areas with its Ryzen CPUs and Radeon GPUs, which have received critical acclaim for their performance and efficiency. Additionally, the growth of cloud computing and the increasing need for more powerful processors to handle AI and machine learning workloads present substantial opportunities for AMD’s server-grade EPYC processors.
Above-average profit margins
Speaking of “fabless” chipmakers, Qualcomm predominantly relies on third parties to produce its best-in-class semiconductor products for wireless communications. That includes a key design for smartphone leader Apple (AAPL), including chips that provide 5G connectivity for iPhones. The VanEck Semiconductor ETF (SMH -4.13%) tracks 25 market cap-weighted, U.S.-listed semiconductor stocks via the MVIS US Listed Semiconductor 25 Index.
Skyworks Solutions (NASDAQ:SWKS)
But the semiconductor sector is growing rapidly as the world rapidly embraces artificial intelligence (AI) development and applications, for which semiconductors are critical for. Semiconductor companies design and manufacture computer chips and related components. They are part of the technology sector but are also manufacturing businesses, which means their businesses are cyclical, like any industrial business. With its rich history of innovation and a robust portfolio of memory technologies, Micron Technology continues to shape the future of data storage and processing, playing a crucial role in advancing the digital economy.
Traders might buy call options if they think a semiconductor stock might rise in price, or they might buy put options if they think it will fall in price. Then you’ll need to choose between buying individual semiconductor stocks, or semiconductor exchange-traded funds (ETFs). ASML controls most of the global photolithography market, and has an absolute monopoly on EUV photolithography, which is necessary for the fabrication of all but the simplest semiconductor chips. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.
The top line, for instance, jumped to $60.9 billion in fiscal 2024 (ended January 28, 2024) from $26.9 billion in fiscal 2022. The bottom line, meanwhile surged to $12.05 per share from $3.91 per share in the same time frame. Hardware, such as PC and laptop chips, tends to become a commodity as the years progress and more advanced chips come out. If a new market is growing quickly, other chipmakers might pile on with similar products. From AI to 5G and Internet of Things (IOT), semiconductor stocks fuel tech innovation, long-term growth, and can offer significant investment returns. If you’re day trading with a little bit of „play money,“ and you don’t mind taking on a lot of risk for a potential short-term profit, single-stock ETFs or leveraged ETFs in the semiconductor space might be what you’re looking for.
This is a very high concentration of risk but is assuaged by the demand for AI chips, likely from Apple or Nvidia, whose appetite seems inexorable. The risk with TSMC is whether or not it is financially strong enough to keep up with demand. When considering the best semiconductor stocks, there’s Nvidia and then there’s everyone else. If you’re interested in investing in semiconductor stocks, you’ll need to open brokerage account first if you don’t already have one. Due to the relative scarcity of its companies — and its growing importance to AI — the semiconductor industry has a unique set of upsides and downsides for investors, relative to other tech stocks. The other is the „fabless-foundry“ model, in which design, fabrication and assembly are all outsourced to separate, specialized firms.
Our list of the best semiconductor stocks is constructed using strict criteria that aim to identify companies with stable operations and strong analyst sentiment. A company’s return on invested capital (ROIC) indicates how well it’s able to generate profit from the cash it raises via debt and equity it receives. A high ROIC means the company is likely innovating strategically, improving operations to increase efficiency, and targeting secular growth trends with new chip designs. Since its opening as a public company through its fiscal year 2022—31 years—TSMC has seen revenue CAGR (compound annual growth) of 20.4% and net income CAGR of 23.7%, according to data from S&P Global Market Intelligence. Long-term debt of $27.2 billion is offset by cash and cash equivalents of $50.8 billion. First, despite the massive $31 billion commitment to property, plant and equipment for 2023, cash flow from operations was nearly $41 billion.
