Semiconductor stocks continued to experience significant growth in 2024, driven largely by advancements in artificial intelligence (AI) and increased demand for high-performance computing. Nvidia led the gain with a 176% increase, followed by Broadcom’s 116% rally. Taiwan Semiconductor gained 94%.
Nvidia Sees “Remarkable” Influx of Retail Investor Dollars
Retail traders sent almost $30 billion into Nvidia shares this year on balance, according to Vanda Research. That has made it the most-bought equity by retail traders on net in 2024. Net inflows for Nvidia have seen a nearly nine-fold jump from 2021, Vanda data shows.
It’s the latest feather in the cap for Nvidia. The AI titan has enamored investors big and small for more than a year. The chipmaker gained admission to the highly regarded Dow Jones Industrial Average last month and is, by and far, the 30-stock index’s best performer of 2024.
Despite rocky trading in December, the “Magnificent Seven” stock is tracking to finish 2024 higher by more than 176%. That surge has propelled the stock into an elite group of companies with market caps that exceed $3 trillion. Nvidia is now the second-most valuable company in the U.S.
Broadcom Stock Skyrocketed 116%, Its Best Year on Record
Shares of Broadcom skyrocketed 116.57% to $241.75 this year as of Dec, 27, its best year on record.
It wasn't always a smooth ascent. Shares of the chip maker were volatile early in 2024, tumbling in March fell after an earnings failed to excite investors, despite beating estimates. But Broadcom stock went on to rally to a record intraday high in June after the company posted even stronger earnings, and declared a 10-for-1 stock split effective July 15. Then in August, the stock slumped as part of a sector-wide selloff ahead of Nvidia earnings.
On Dec. 12, Broadcom reported strong fiscal-fourth-quarter earnings and provided strong guidance.
The company joined the $1 trillion club when its market capitalization topped that on Dec. 13. It is the eighth largest public company by market cap in the U.S. and the ninth in the world, according to Dow Jones Market Data.
Broadcom shareholders are getting a New Year's gift in the form of an increased dividend. The company is paying a quarterly dividend of 59 cents per share, an 11% hike from the last dividend of 53 cents, on Dec. 31.
TSMC Remains the Best Way to Play the AI Theme
TSMC shares are up 93.88% this year amid continued investor enthusiasm for artificial intelligence trades.
“For us, TSMC remains the best way to play the AI theme without having to pick a winner or a technology, at a reasonable valuation,” said Kevin Net, head of Asian equities at Financiere de L Echiquier. The next catalyst to watch will be Nvidia’s presentation at CES 2025 next month as well as TSMC’s upcoming results and guidance, he added.
With a client list that also includes Apple Inc. and Advanced Micro Devices Inc., TSMC has been a major beneficiary of the boom in AI spending. The company is expected to report sales growth of 36% for the December quarter, with a gross profit margin at 58.3%, the highest since 2022.
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