10 Best Semiconductor Penny Stocks To Invest In Right Now

At this point, it’s worth looking at the source of all the froth in Nvidia (NVDA), considered one of Wall Street’s best semiconductor stocks. Over the last three years, revenue and earnings per share have grown substantially. 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. With a strategic focus on cloud computing, the Internet of Things and the proliferation of smart devices, Intel is diversifying its portfolio to address emerging technology trends. The company’s efforts in areas like AI, 5G review encyclopedia of chart patterns networking and autonomous driving technology underscore its commitment to evolving alongside the rapidly changing tech landscape.

Similarly, the semiconductor stock that is up 16% over the past year also has notable exposure to China. Yet, for the three months ending in July, this percentage dropped to 32% as US government restrictions against American chip firms from supplying products to China continued to affect it. This semiconductor firm provides products such as plasma abatement systems, epitaxy systems, film deposition systems, and etching masks. As a result, even if there are no US-Chinese tensions, the fact that China’s economy and industrial production have slowed naturally reduces the demand for its products. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries forexee with investors.

Taiwan Semiconductor (TSM)

If management can attain the growth it projects, this could be a sleeper, or possibly an acquisition target at some point. Given the huge demand for semiconductors, combined with TSMC’s improving gross margins and pricing power, not to mention its attractive valuation, this is a strong option for investors to consider at current levels. Further, the capital expenditures last fiscal year of $18.2 billion could have been handily covered by $28 billion in cash flow from operations. The company repurchases shares, $9.5 billion in 2023, which is a large commitment in absolute terms, but when compared to a market cap of $3 trillion, a drop in the bucket. Micron Technology (MU) is on this list of the best semiconductor stocks because it is benefitting from the AI explosion through its DRAM and NAND memory chips. The more memory required for AI operations, the more DRAM modules and components that MU can sell.

NVIDIA

Finally, the downstream chip supply chain is made of designers who sell the products and others who assemble chips into the hardware needed for their proper functioning. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, personal finance education, top-rated podcasts, and non-profit The Motley Fool Foundation. With its commitment to innovation and quality, TSM has established itself as a key player in the semiconductor industry, continuously advancing the frontiers of process technology. AMD’s strategic alignment with significant industry growth drivers, robust financial performance and competitive product offerings underscore its status as a top semiconductor stock for 2024.

Navitas Semiconductor Corporation Price and Consensus

Starting from the former, during the third quarter, 51% of the firm’s revenue came from high-performance computing (HPC) products. These chips are involved in data centers, enterprise computing, and other workloads, and they also have wide exposure to the artificial intelligence industry. Nvidia continues to dominate in the realms of AI and gaming, with its GPUs becoming increasingly indispensable for data centers and autonomous technologies. AMD’s impressive performance in both the CPU and GPU markets, driven by its Ryzen and Radeon lines, positions it as a strong competitor to Intel and Nvidia. With its focus on memory and storage solutions, Micron is set to benefit from the data explosion by AI and machine learning technologies. TSM, the world’s leading semiconductor foundry, is critical in the supply chain, manufacturing chips for industry giants and benefiting from the overall growth in chip demand.

• 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.
• That bodes well not just for shares but also for the potential of greater dividends supported by this stronger stream of profits going forward.
• And while TSMC is not the world’s only semiconductor contract manufacturer, like Nvidia, it too has been able to create a wide moat.
• The other is the “fabless-foundry” model, in which design, fabrication and assembly are all outsourced to separate, specialized firms.
• Those upgrades, which strengthen devices’ processing power or wireless connectivity, are currently causing a global chip shortage that could persist throughout the rest of 2021.

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 the pivot point 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. Regarding valuation, Nvidia’s stock reflects the company’s aggressive growth trajectory and the high expectations for its future performance. While its valuation metrics may appear high relative to historical standards, they are justified by Nvidia’s potential for continued leadership and growth in key technology sectors.

TSMC has continued to make the investments to provide the newest semiconductor manufacturing possible for its customers, which include such tech luminaries as Apple AAPL , AMD, Qualcomm QCOM , NVIDIA DIA and Sony. TSMC has also seen strong pricing power, which has been pushing up its gross margins. Meanwhile, according to Morgan Stanley, the company has already told customers that it will raise prices in 2025, including by 10% for AI semiconductors. From compact personal computers to giant data servers, companies from the semiconductor industry have had a major impact on individual consumers and multinational corporations.

This presents a unique opportunity for you to choose a technology company that aligns with your stock portfolio. Here’s a comprehensive guide to help you invest in the best semiconductor stocks on the stock market. The best chip stock depends on your targeted end market (e.g. smartphones, PCs, data centers, gaming, etc.). For example, take chip manufacturers such as the world’s largest, Taiwan Semiconductor Manufacturing (TSM -1.44%). However, it also has more cash and investments than it does debt, which signifies a healthy and profitable business that has no problems getting funding.

Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer. Riding high on favorable legislation (the CHIPS and Science Act) and strong demand for faster and more efficient chips for AI and cryptocurrency applications, the semiconductor industry outperformed the broader market by a wide margin in 2023. The second half of 2024 has shown some volatility in these stocks, however, as investors start to wonder if the hype around AI was at all overblown. Many tech giants might still call Silicon Valley home but smaller and smarter semiconductor stocks are popping up in every major market hub you can find on the map. You can invest in these companies to improve the growth and gains of your portfolio.