To The Moon

As technology continues to advance, the importance of the semiconductor industry continues to grow. Electronic equipment needs semiconductor chips, and the cloud computing network that enterprises rely on every day does not use chips. Today, with the rise of high-end technologies such as artificial intelligence (AI), the role of the semiconductor industry in the economy is becoming more and more critical.

Since 2023, semiconductor stocks in the U.S. stock market have also skyrocketed.

$GSI Technology(GSIT)$ $eMagin(EMAN)$ $Navitas Semiconductor Corp(NVTS)$ $NVIDIA Corp(NVDA)$ $Maxeon Solar Technologies Ltd(MAXN)$ $Advanced Micro Devices(AMD)$ $Wisekey International Holding AG(WKEY)$ $Rambus(RMBS)$ $Indie Semiconductor Inc.(INDI)$ $Spi Energy Co Ltd(SPI)$

The prices of the following two chip stocks have skyrocketed this year, but even so, their shares, especially in the long run, have further room to rise.

Semiconductor Stock 1: $Advanced Micro Devices(AMD)$

Shares of Advanced Micro Devices Inc are up 67% in 2023, but are still down 30% from their all-time highs. In the past 12 months, the high inflation and high interest rate environment has put pressure on consumer spending, leading to a decline in sales of personal computing and gaming chips, and AMD's performance has also suffered a sharp freeze.

However, in the first quarter, the company said that its performance in the second half of 2023 will improve significantly, and at the same time announced a long-term artificial intelligence strategy.

To accelerate its AI strategy, AMD has consolidated its best AI teams into a single division headed by the former CEO of adaptive computing giant Xilinx. At present, $NVIDIA Corp(NVDA)$ occupies 90% of the AI semiconductor market, but $Advanced Micro Devices(AMD)$ is not ready to give up this piece of fat. Europe's fastest supercomputer $Luminex Resources Corp.(LUMIF)$ is powered by AMD's MI250X chip, and the company expects to deliver eight times more performance in its MI300 data center chip, which the company expects to release later this year. MI300 will be the world's first APU (accelerated processor).

By 2030, emerging concepts such as generative AI may add $200 trillion in output value to the global economy, which means that the demand for high-end data center chips will explode during this period. AMD's core consumer business may be weak now, but in the long run, with the help of AI, the company is expected to become one of the largest companies in the world.

Semiconductor Stock 2: $Axcelis(ACLS)$

Shares of Axcelis Technologies Inc (NASDAQ:ACLS ) are up 77.7% so far this year and are trading near all-time highs. The company does not produce chips, but the ion implantation equipment that is critical to chip manufacturing, and its customers are large chip manufacturers.

Axcelis has a backlog of US$1.1 billion at the end of 2022, rising to US$1.27 billion in the first quarter of 2023, indicating that demand for the company's products is still growing. In addition, the company’s first-quarter revenue rose 24.7% to $254 million, well above the guidance of $240 million. As a result, management raised its full-year 2023 revenue forecast by $30 million to $1.03 billion. Additionally, the company's earnings per share rose 17.2%.

Based on trailing 12-month earnings of $5.67 per share, the stock has a price-to-earnings ratio of 24.9, still below the tech sector average (the Nasdaq 100 has a P/E ratio of 28.1). Given the company's high growth and future revenue backed by a large order backlog, $Axcelis(ACLS)$ stock should enjoy a premium.