Advertisement
New Zealand markets open in 8 hours 19 minutes
  • NZX 50

    11,735.71
    +35.92 (+0.31%)
     
  • NZD/USD

    0.6111
    -0.0026 (-0.42%)
     
  • ALL ORDS

    8,132.10
    +49.80 (+0.62%)
     
  • OIL

    79.47
    -0.59 (-0.74%)
     
  • GOLD

    2,422.10
    +4.70 (+0.19%)
     

5 Solid Semiconductor Stocks to Buy on Rebounding Sales

The semiconductor industry is having a bumpy ride. Sales have been steadily making a rebound but the challenges are far from over. However, the future holds promise given the high demand for chips.

The Semiconductor Industry Association (SIA) said on Apr 3 that global semiconductor sales totaled $46.2 billion in February, up 16.3% year over year. Sales in February 2023 totaled $39.7 billion.

However, after a steady rise over the past few months, semiconductor sales fell 3.1% from January’s total of $47.6.

Regionally, year-over-year sales increased 28.8% in China, 22% in the Americas and 15.4% in Asia Pacific. However, sales declined 8.5% in Europe.

ADVERTISEMENT

John Neuffer, SIA president and CEO, said, “Although month-to-month sales were down slightly, global semiconductor sales in February remained well ahead of the total from the same month last year, a continuation of the strong year-to-year growth the market has experienced since the middle of last year.”

The semiconductor industry’s growth stalled after reaching unprecedented heights during the peak of the pandemic.

Rising costs, supply-chain disruptions, and higher interest rates resulting from the Federal Reserve's aggressive efforts to combat inflation acted as headwinds for the industry, particularly as demand slowed during the second half of 2022.

As inflation began to ease, alleviating price pressures, demand rebounded.

Also, the ongoing enthusiasm surrounding artificial intelligence (AI), especially generative AI, is expected to stimulate semiconductor sales in the near term. Experts believe that AI has tremendous potential and the world is yet to witness that.

This has seen a large number of tech companies exploring the avenue in their bid to grab business opportunities. This is further likely to make semiconductors all the more important in the near term.

According to a forecast by Gartner, global semiconductor revenues are projected to jump 16.8% this year totaling $624 billion.

Our Choices

Given the promising future, it would be wise to invest in semiconductor stocks like NVIDIA Corporation NVDA,Lam Research Corporation LRCX, Applied Materials, Inc. AMAT, Micron Technology, Inc. MU and ACM Research, Inc. ACMR, which investors can gain from in the near term.

NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.

NVIDIA has an expected earnings growth rate of 14.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 19.5% over the last 60 days. NVDA presently has a Zacks Rank #2.

Lam Research Corporation supplies wafer fabrication equipment and services to the semiconductor industry. LAM’s products are used by semiconductor manufacturers in front-end and WLP processes, creating memory, microprocessors, and other logic-integrated circuits for a broad range of electronic devices.

Lam Research Corporation’s expected earnings growth rate for next year is 19.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 60 days. LRCX presently has a Zacks Rank #2.

Applied Materials, Inc. is one of the world's largest suppliers of equipment for the fabrication of semiconductors, flat panel liquid crystal displays, and solar photovoltaic cells and modules. AMAT also offers deployment and support services related to the equipment supplied.

Applied Materials’ expected earnings growth rate for next year is 15.6%. The Zacks Consensus Estimate for current-year earnings has improved 6.1% over the past 60 days. AMAT presently carries a Zacks Rank #2.

Micron Technology, Inc. has established itself as one of the leading worldwide providers of semiconductor memory solutions. Through global brands, namely Micron, Crucial and Ballistix, MU manufactures and markets high-performance memory and storage technologies including Dynamic Random Access Memory, NAND flash memory, NOR Flash, 3D XPoint memory and other technologies. Micron Technology’s solutions are used in leading-edge computing, consumer, networking and mobile products.

Micron Technology’s expected earnings growth rate for next year is 717.5%. The Zacks Consensus Estimate for current-year earnings has improved 235.6% over the past 60 days. MU currently carries a Zacks Rank #2.

ACM Research, Inc. develops, manufactures and sells single-wafer wet cleaning equipment, which semiconductor manufacturers can use in numerous manufacturing steps to remove particles, contaminants and other random defects. ACMR is headquartered in Fremont, CA.

ACM Research’s expected earnings growth rate for next year is 38.9%. The Zacks Consensus Estimate for current-year earnings has improved 20.9% over the past 60 days. ACMR presently sports a Zacks Rank #1.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Micron Technology, Inc. (MU) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Lam Research Corporation (LRCX) : Free Stock Analysis Report

Applied Materials, Inc. (AMAT) : Free Stock Analysis Report

ACM Research, Inc. (ACMR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research