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Semiconductor Sales Gain Momentum: 4 Growth Stocks to Buy Now
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The semiconductor industry’s global sales are gaining momentum. The Semiconductor Industry Association recently reported a 1.7% month-over-month increase and 18.3% year-over-year growth in global semiconductor sales, reaching $50 billion in May.
Year-over-year growth was strongest in the Americas, with sales jumping 42.8%, trailed by China and Asia Pacific/All Other, sales of which increased 21.6% and 12.7%, respectively.
In the second quarter of 2024, global sales increased 18.3% year over year and 6.5% sequentially to $149.9 billion.
Semiconductor Sales: 2024 Forecasts Positive
Forecasts for 2024 paint an optimistic picture, expecting sustained demand to propel sales growth.
The World Semiconductor Trade Statistics (WSTS) projects an impressive 16% increase over 2023, up from the previous guidance of 13.1%. Global sales for 2024 are anticipated to reach $611.2 billion. Americas’ sales are expected to lead, with sales likely to surge more than 25% this year. For 2025, WSTS global sales are expected to grow 12.5%, ultimately reaching $687.4 billion.
The semiconductor industry is well-poised to benefit from the growing proliferation of AI and machine learning. Spending on AI systems is expected to accelerate in 2024 and 2025 as organizations continue to leverage AI as part of their digital transformation efforts. The advent of Generative AI (GenAI) has further attracted investments.
Rising demand for generative AI chips required in Large Language Models, which is the base of this technology, is expected to benefit the semiconductor component providers.
Gartner estimates spending on AI software to witness a CAGR of 19.1% between 2022 and 2027 to hit $297 billion in 2027. GenAI software spending is expected to surge from 8% in 2023 to 35% by 2027. IDC expects worldwide revenues for AI platforms software to witness a CAGR of 40.6% over the 2023-2028 timeframe.
Our Picks
Here, we have picked four semiconductor stocks — Taiwan Semiconductor (TSM - Free Report) , Impinj (PI - Free Report) , Cirrus Logic (CRUS - Free Report) and Micron (MU - Free Report) — that are well-poised to grow, driven by increasing demand for semiconductor content across a variety of domains, including data centers and electric vehicles.
These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy).
Per the Zacks proprietary methodology, stocks with this favorable combination offer good investment opportunities.
Taiwan Semiconductor’s strength in wafer fabrication processes is the key catalyst. Its solid momentum among customers, increasing design wins, and strong presence in the domestic and international markets are major positives.
TSM’s expanding network of semiconductor facilities, which currently includes one 150mm wafer fab, six 200mm wafer fabs, six 300mm wafer fabs and five advanced backend fabs, bode well for its near and long-term prospects.
The Zacks Consensus Estimate for 2024 earnings has been revised upward by 4% to $6.37 per share over the past 30 days, indicating a 22.97% increase from 2023.
Taiwan Semiconductor Manufacturing Company Ltd. Price and Consensus
Impinj currently sports a Zacks Rank #1 and carries a Growth Score of A. The consensus mark for 2024 earnings has decreased 11.06% over the past 30 days to $1.93 per share. The stock has gained 54.8% year to date.
PI is benefiting from strength in the end-point IC product line, which is driving its momentum in retail apparel and general merchandise applications. Strength in Impinj’s self-checkout and loss prevention solutions is a positive. The growing penetration of RAIN products in the apparel category is a plus.
Cirrus Logic currently carries a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for 2024 earnings has been steady at $6.04 over the past 30 days. The stock has gained 38.2% year to date.
Cirrus Logic is gaining from lucrative investment and innovative product mix strategies. It plans to invest in the advanced battery and power technology market related to high-efficiency charging, battery management and system-side power delivery. It expects to launch its next-generation custom-boosted amplifier and its first 22-nanometer smart codec in the fall of 2024.
Micron currently carries a Zacks Rank #2 and a Growth Score of A. Shares have returned 4.7% year to date.
Micron is benefiting from improved market conditions, robust sales executions and strong growth across multiple business units. The positive impact of inventory improvement in the data center, as well as stabilization in other markets, such as automotive, industrial and others, is contributing to top-line growth.
MU anticipates the pricing of DRAM and NAND chips to increase next year, thereby improving its revenues. The pricing benefits should primarily be driven by rising AI servers, causing a scarcity in the availability of cutting-edge DRAM and NAND supply.
The Zacks Consensus Estimate for fiscal 2024 earnings has been steady at $1.16 per share over the past 30 days, suggesting massive 126.07% year-over-year growth.
Image: Bigstock
Semiconductor Sales Gain Momentum: 4 Growth Stocks to Buy Now
The semiconductor industry’s global sales are gaining momentum. The Semiconductor Industry Association recently reported a 1.7% month-over-month increase and 18.3% year-over-year growth in global semiconductor sales, reaching $50 billion in May.
Year-over-year growth was strongest in the Americas, with sales jumping 42.8%, trailed by China and Asia Pacific/All Other, sales of which increased 21.6% and 12.7%, respectively.
In the second quarter of 2024, global sales increased 18.3% year over year and 6.5% sequentially to $149.9 billion.
Semiconductor Sales: 2024 Forecasts Positive
Forecasts for 2024 paint an optimistic picture, expecting sustained demand to propel sales growth.
The World Semiconductor Trade Statistics (WSTS) projects an impressive 16% increase over 2023, up from the previous guidance of 13.1%. Global sales for 2024 are anticipated to reach $611.2 billion. Americas’ sales are expected to lead, with sales likely to surge more than 25% this year. For 2025, WSTS global sales are expected to grow 12.5%, ultimately reaching $687.4 billion.
The semiconductor industry is well-poised to benefit from the growing proliferation of AI and machine learning. Spending on AI systems is expected to accelerate in 2024 and 2025 as organizations continue to leverage AI as part of their digital transformation efforts. The advent of Generative AI (GenAI) has further attracted investments.
Rising demand for generative AI chips required in Large Language Models, which is the base of this technology, is expected to benefit the semiconductor component providers.
Gartner estimates spending on AI software to witness a CAGR of 19.1% between 2022 and 2027 to hit $297 billion in 2027. GenAI software spending is expected to surge from 8% in 2023 to 35% by 2027. IDC expects worldwide revenues for AI platforms software to witness a CAGR of 40.6% over the 2023-2028 timeframe.
Our Picks
Here, we have picked four semiconductor stocks — Taiwan Semiconductor (TSM - Free Report) , Impinj (PI - Free Report) , Cirrus Logic (CRUS - Free Report) and Micron (MU - Free Report) — that are well-poised to grow, driven by increasing demand for semiconductor content across a variety of domains, including data centers and electric vehicles.
These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy).
Per the Zacks proprietary methodology, stocks with this favorable combination offer good investment opportunities.
YTD Performance
Image Source: Zacks Investment Research
Taiwan Semiconductor currently sports a Zacks Rank #1 and has a Growth Score of A. Shares have returned 47.3% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
Taiwan Semiconductor’s strength in wafer fabrication processes is the key catalyst. Its solid momentum among customers, increasing design wins, and strong presence in the domestic and international markets are major positives.
TSM’s expanding network of semiconductor facilities, which currently includes one 150mm wafer fab, six 200mm wafer fabs, six 300mm wafer fabs and five advanced backend fabs, bode well for its near and long-term prospects.
The Zacks Consensus Estimate for 2024 earnings has been revised upward by 4% to $6.37 per share over the past 30 days, indicating a 22.97% increase from 2023.
Taiwan Semiconductor Manufacturing Company Ltd. Price and Consensus
Taiwan Semiconductor Manufacturing Company Ltd. price-consensus-chart | Taiwan Semiconductor Manufacturing Company Ltd. Quote
Impinj currently sports a Zacks Rank #1 and carries a Growth Score of A. The consensus mark for 2024 earnings has decreased 11.06% over the past 30 days to $1.93 per share. The stock has gained 54.8% year to date.
PI is benefiting from strength in the end-point IC product line, which is driving its momentum in retail apparel and general merchandise applications. Strength in Impinj’s self-checkout and loss prevention solutions is a positive. The growing penetration of RAIN products in the apparel category is a plus.
Impinj, Inc. Price and Consensus
Impinj, Inc. price-consensus-chart | Impinj, Inc. Quote
Cirrus Logic currently carries a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for 2024 earnings has been steady at $6.04 over the past 30 days. The stock has gained 38.2% year to date.
Cirrus Logic is gaining from lucrative investment and innovative product mix strategies. It plans to invest in the advanced battery and power technology market related to high-efficiency charging, battery management and system-side power delivery. It expects to launch its next-generation custom-boosted amplifier and its first 22-nanometer smart codec in the fall of 2024.
Cirrus Logic, Inc. Price and Consensus
Cirrus Logic, Inc. price-consensus-chart | Cirrus Logic, Inc. Quote
Micron currently carries a Zacks Rank #2 and a Growth Score of A. Shares have returned 4.7% year to date.
Micron is benefiting from improved market conditions, robust sales executions and strong growth across multiple business units. The positive impact of inventory improvement in the data center, as well as stabilization in other markets, such as automotive, industrial and others, is contributing to top-line growth.
MU anticipates the pricing of DRAM and NAND chips to increase next year, thereby improving its revenues. The pricing benefits should primarily be driven by rising AI servers, causing a scarcity in the availability of cutting-edge DRAM and NAND supply.
The Zacks Consensus Estimate for fiscal 2024 earnings has been steady at $1.16 per share over the past 30 days, suggesting massive 126.07% year-over-year growth.
Micron Technology, Inc. Price and Consensus
Micron Technology, Inc. price-consensus-chart | Micron Technology, Inc. Quote