What Are The Best Semiconductor Stocks To Buy Now?
πππPicking Top Semiconductor stocks can be tricky and their performance are volatile since their sales volumes ebb and flow. However the semiconductor sector is rapidly growing as semiconductors are very much part of our digital world and we can't do without them. Global spending on chips was USD 570 billion and by 2030, it will hit at least USD 1 Trillion.
Which are the best semiconductor stocks to buy now?
Is a world leader in Artificial Intelligence Computing through their specialised GPU. It also drives advances in Gaming, Creative Design, Autonomous Vehicles and Robotics.
Nvidia share price is up today with a 3.7% jump at USD 423.25. However it is nowhere close to its all time high of USD 502.66.
On Wednesday, Nvidia's share price dropped by 5% to a near 5 month low following a report that Nvidia maybe forced to cancel up to USD 5 billion worth of advanced chip orders to China in compliance with new US government restrictions. However even if Nvidia can't sell these chips to China, the current demand for such chips is still so high that it is not too diificult for Nvidia to find other buyers due to the surge in AI demand.
The general consensus of Wall Street Analysts for Nvidia is a Buy, Target price of USD 645.53, a huge upside potential of 52%!
Another great Semiconductor stock is $Advanced Micro Devices(AMD)$
AMD has just reported its 3Q 2023 earnings. AMD has beaten Wall Street's targets for the 3rd quarter but missed with its outlook for the current period. AMD earned a 70 cents a share on sales of USD 5.8 billion in the September quarter versus Analysts' expectations of 68 cents per share on sales of USD 5.7 billion.
In the 4th quarter AMD expects to see strong growth in Data Center which will partially offset lower sales in the Gaming segment and additional softening of demand in the embedded markets. AMD forecasted a 4th quarter revenue of USD 6.1 billion versus USD 6.37 billion expected by Analysts.
However AMD gave a promising 2024 forecast for its AI chips business when CEO Lisa Su said that AMD expects GPU revenue of USD 400 Million during the 4th quarter and to top USD 2 billion in 2024.
AMD 's share price rallied after that and jumped 9% today. AMD is one of only a few companies that are capable of making high powered GPUs that power AI models.
Wall Street Analysts are bullish on AMD with a Buy rating, Target price of USD 137.48, an upside potential of 26%.
has just posted its 3rd quarter earnings report. Intel's revenue fell 8% year over year to USD 14.2 billion but exceeded analysts expectations by USD 560 million. Its adjusted earnings earnings grew 11% to 41 cents per share and cleared analysts forecast of 19 cents per share.
Even though Intel 's revenue is declining year over year, the market anticipates a turnaround in the PC' s cyclical market. The current US China geopolitical tension will benefit Intel as it is an American company.
Intel has just submitted all 4 of its major Manufacturing proposals in Arizona, New Mexico, Ohio and Oregon which represents more than USD 100 billion to the US Department of Commerce 's CHIPS program office.
At Intel Innovation 2023, Intel outlined its strategy to bring AI everywhere, making it more accessible from client to network and cloud. Intel demonstrated how it is delivering AI capabilities across its hardware products and making it accessible through open multi architecture software solutions.
Intel's share price is up 13% in the past 5 days and 39% year to date.
Wall Street Analysts are mixed on Intel with a Target price of USD 38 to USD 56.
$Taiwan Semiconductor Manufacturing(TSM)$
is the world's largest dedicated pure play semiconductor foundry. TSMC produces over 60% of the world 's semiconductors and over 90% of the world's advanced ones.
Even Nvidia uses TSMC' s services. Most of the leading fabless semiconductor companies such as AMD, Apple, ARM, Broadcom, Qualcomm are customers of TSMC.
TSMC's share price is only up 18% year todate. Wall Street Analysts are bullish on TSMC with a Target price of USD 111.24, an upside potential of 30%.
In summary, Nvidia, AMD, Intel and TSMC are the best semiconductor stocks to buy in 2023. However if it is too difficult to choose which one to buy and if you have limited resources, you can consider $VanEck Vectors Semiconductor ETF(SMH)$ which includes all these 4 stocks and much more.
The Top 10 holdings includes Nvidia, TSMC, Broadcom, ASML, AMD, Intel, Qualcomm, Applied Materials, Texas Instruments and Analog Devices. The Top 10 holdings have a weightage of 72% of the ETF. The expense ratio is 0.35%. Assets Under Management is USD 9.23 billion. The current dividend yield is 0.87%.
Performance wise SMH is up 37% year todate and an impressive 48% in 1 year.
I favour SMH as it offers me value for money, diversification and the combined power of 25 of the best semiconductor stocks in just 1 awesome ETF. SMH is my tactical play on the future of AI and the best semiconductor stocks in the market. How good is that!
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Given all the growth opportunities that Intel has going for it, it would be safe to assume that the upside could be greater as Intel has the momentum going for it.
it is reasonable to expect Nvidia's stock price to reach approximately $2000
NVDA will be like AMZN of last 5 year, no growth in share price despite a really good company.
AI is not over rated but NVIDIA is definitely over hyper , over valued and over rated
AMD was a fantastic growth story, but itβs slowed considerably.