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3 Semiconductor Stocks to Buy in 2024 as the Sector Marches on
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Semiconductors have been the success story of Wall Street over the past two years. Much of the gain that the technology sector has made since the onset of 2023 has been based on the AI optimism-led semiconductor boom. The rising demand for electronics also ensures their status as profitable holdings for investors.
Per the Semiconductor Industry Association, global sales for semiconductors are expected to reach $611.2 billion in 2024, rising 16% year over year. In 2025, it is likely to rise 12.5%. The chip-making sector is not only attracting investors but has also availed billions of dollars from the Biden administration to build factories in the United States.
The semiconductor boom has led to advances in communications, computing, health care, military systems, transportation, clean energy and countless other applications. Over the past week, the semiconductor industry has risen 1.9%, with NVIDIA Corporation (NVDA - Free Report) up 0.8%. The industry has surged 94% over the past year.
The benchmark iShares Semiconductor ETF (SOXX) has grown 35.8% year to date as of Jul 15, despite sectoral headwinds like the Israel-Palestine conflict. The global semiconductor market's fundamentals remain robust, and the chip market is expected to grow even further in the second half of 2024. Much of the gains made over the past year and a half can be accredited to the meteoric rise of NVIDIA. However, the sector has other stocks that promise a lot. Overlooked semiconductor stocks, in particular, present significant potential.
Our Picks
We have selected three semiconductor stocks. These stocks have a Zacks Rank #1 (Strong Buy) or #2 (Buy). The search was also narrowed down to stocks with a VGM Score of A or B. Here, V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three metrics and allows one to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here
Taiwan Semiconductor Manufacturing Company Limited (TSM - Free Report) is the world's largest contract chipmaker. They build chips designed by others. The company was recently valued near $1 trillion.
TSM’s expected earnings growth rate for the current year is 18.9%. The Zacks Consensus Estimate for its current-year earnings has improved 1% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of B.
Micron Technology, Inc. (MU - Free Report) is another industry giant, valued at around $145 billion, and specializes in memory and storage chips.
MU’s expected earnings growth rate for the current year is 126.1%. The Zacks Consensus Estimate for its current-year earnings has improved 31.8% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of B.
Cirrus Logic, Inc. (CRUS - Free Report) is a semiconductor company that develops low-power, high-precision mixed-signal processing solutions in China, the United States and globally.
CRUS’ expected earnings growth rate for the next year is 13.7%. The Zacks Consensus Estimate for its next-year earnings has improved 3.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of B.
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3 Semiconductor Stocks to Buy in 2024 as the Sector Marches on
Semiconductors have been the success story of Wall Street over the past two years. Much of the gain that the technology sector has made since the onset of 2023 has been based on the AI optimism-led semiconductor boom. The rising demand for electronics also ensures their status as profitable holdings for investors.
Per the Semiconductor Industry Association, global sales for semiconductors are expected to reach $611.2 billion in 2024, rising 16% year over year. In 2025, it is likely to rise 12.5%. The chip-making sector is not only attracting investors but has also availed billions of dollars from the Biden administration to build factories in the United States.
The semiconductor boom has led to advances in communications, computing, health care, military systems, transportation, clean energy and countless other applications. Over the past week, the semiconductor industry has risen 1.9%, with NVIDIA Corporation (NVDA - Free Report) up 0.8%. The industry has surged 94% over the past year.
The benchmark iShares Semiconductor ETF (SOXX) has grown 35.8% year to date as of Jul 15, despite sectoral headwinds like the Israel-Palestine conflict. The global semiconductor market's fundamentals remain robust, and the chip market is expected to grow even further in the second half of 2024. Much of the gains made over the past year and a half can be accredited to the meteoric rise of NVIDIA. However, the sector has other stocks that promise a lot. Overlooked semiconductor stocks, in particular, present significant potential.
Our Picks
We have selected three semiconductor stocks. These stocks have a Zacks Rank #1 (Strong Buy) or #2 (Buy). The search was also narrowed down to stocks with a VGM Score of A or B. Here, V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three metrics and allows one to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here
Taiwan Semiconductor Manufacturing Company Limited (TSM - Free Report) is the world's largest contract chipmaker. They build chips designed by others. The company was recently valued near $1 trillion.
TSM’s expected earnings growth rate for the current year is 18.9%. The Zacks Consensus Estimate for its current-year earnings has improved 1% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of B.
Micron Technology, Inc. (MU - Free Report) is another industry giant, valued at around $145 billion, and specializes in memory and storage chips.
MU’s expected earnings growth rate for the current year is 126.1%. The Zacks Consensus Estimate for its current-year earnings has improved 31.8% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of B.
Cirrus Logic, Inc. (CRUS - Free Report) is a semiconductor company that develops low-power, high-precision mixed-signal processing solutions in China, the United States and globally.
CRUS’ expected earnings growth rate for the next year is 13.7%. The Zacks Consensus Estimate for its next-year earnings has improved 3.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of B.