Chip Boom Champions: 3 Semiconductor Stocks to Quadruple Your Money – InvestorPlace
For investors looking for top ways to play the chip sector, consider these three semiconductor stocks to quadruple your money
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The emergence of artificial intelligence stands as a force ready to transform several prominent industries. Investors looking to seize a rare chance to capitalize on these gains have aimed their efforts at leading semiconductor stocks to quadruple their money. Such a move clearly makes sense.
Demand for high-powered AI chips powering self-driving cars and medical diagnosis continues to soar. This growth isn’t hype — 2024 forecasts unprecedented market expansion. AI demands advanced chip structures for data handling and computations. These stocks enable investors to profit from AI’s explosive growth.
Semiconductors revolutionize modern life. Consider investing in semiconductor stocks in April as long-term bets. These are three of the top players in the sector that I don’t think get enough love. Accordingly, those looking for a more diversified chips portfolio should look at the stocks investors are looking at now.
First off the list is the Asian semiconductor company Taiwan Semiconductor (NYSE:TSM). The company’s Q1 earnings were recently released, and these numbers impressed investors with Taiwan Semi’s excellent results.
TSMC stock surged as the company reported 16.5% sales growth on a year-over-year basis. The company’s March-quarter sales hit $18.86 billion, easily surpassing estimates of $18.26 billion. Previous-year sales were $16.62 billion, signaling strong growth over time. TSMC’s Q1 revenue rebounded after four quarters of decline. Clients include some of the most prominent names in this space, such as Advanced Micro Devices (NASDAQ:AMD), Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA).
Analyst Charles Shi maintained a buy rating for TSM stock, raising his price target to $168 from R133. He cited TSMC’s strength in AI and said that despite the impact of an earthquake, the company expects to meet its full-year growth target. Shi predicts a Q3 recovery, and I’m in line with this view.
The company also holds 50% of the contract chip manufacturing market to add to this thesis. It dominates the highest-performing computing sector. Alongside AMD, Nvidia and Broadcom, TSMC also shares the success of AI chips as these companies rely on TSMC. With cutting-edge chip tech like 3nm and upcoming 2nm processes, TSMC drives AI innovation. Bullish forecasts predict over 20% revenue growth in FY24. Expanding with new plants in Germany and Japan, TSMC leads the AI revolution.
Predicted to have an upward trajectory until 2027, ASML (NASDAQ:ASML) is a semiconductor stock every investor should have in their portfolio right now. Analysts predict a 25% rise to $1,215 per share by 2025. Progression suggests $1,500 in 2026 and nearly $1,900 by 2027, doubling the current value. ASML’s dominance in chip technology, especially EUV lithograph, which is crucial for AI, supports this potential growth.
Based in the Netherlands, the company revolutionizes semiconductor production for Intel and TSMC using EUV light, creating ultra-thin lines on silicon. Its lithography dominance, shielded by patents, faces challenges from espionage and trade disputes.
ASML’s future shines bright, particularly in lithography. Mordor Intelligence forecasts over 11% annual growth for EUV lithography through 2029. Demand for high-performance chips, essential for AI, fuels ASML’s prospects, with Taiwan Semiconductor as a critical client. Moreover, a Goldman Sachs (NYSE:GS) analyst’s note highlights favorable risk/reward in ASML, driven by AI momentum.
Recently upgraded by analysts, Applied Materials (NASDAQ:AMAT) excels in semiconductor and display equipment, favored by JPMorgan (NYSE:JPM) with a $260 price target. Strategic positioning and tech advancements, like HBM and GAA, position the company well for market share growth in a projected $110 billion market by 2025. Q1 results surpassed forecasts, underlining its market strength and strategic accuracy.
Cantor Fitzgerald also upgraded Applied Materials to overweight, raising their price target to $260 per share. Expectations of a strong semiconductor equipment market drove this shift. Applied Materials’ strategic position and tech advancements, including HBM and GAA transistors, fuel optimism for market share growth.
Applied Materials’ GAAP earnings were $2.41 per share, exceeding the non-GAAP $2.13. Despite a slight sales decline from Q1 2023, improved gross and operating margins led to a 19% year-over-year profit increase. Services segment profitability, notably, rose significantly, aiding overall profitability.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.
Semiconductor, Technology
Article printed from InvestorPlace Media, https://investorplace.com/2024/04/chip-boom-champions-3-semiconductor-stocks-to-quadruple-your-money/.
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