To The Moon

Which of the top 23 semiconductor stocks will give the best return in terms of stock price gain in 2022?

To answer this, we first look at their performance to date this year YTD, in chart below.

% Gain – Prices of Top Semis Stocks YTD 2022

The top performer YTD is contract chipmaker GlobalFoundries (GFS) +10.74% increased in stock price, riding high on the huge pent-up demand and backlog of orders for semiconductors, amid a global chip shortage. Why did the rest of the semis stocks show up double digit % drop? It turned out prices have had a monstrous run in 2021, and all tickers dropped in tandem with the broader Markets, due to geopolitical conflict and rate hikes uncertainties in Jan to mid Mar 2022.

Next, looking at 1-year stock prices might give better clues of this year’s performance, as the chip shortage that started in 2020 looks set to continue well into 2022. In chart below, the top three performers are Nvidia $NVIDIA Corp(NVDA)$ +119.16%, Advanced Micro Devices $AMD(AMD)$  +56.90% and GlobalFoundries $GLOBALFOUNDRIES Inc.(GFS)$  +54.76%. 

% Gain – Prices of Top Semis Stocks 1-Year 2021

Now, are the 1-year results a one-off, ‘flash in the pan', or are there sustainable patterns? Looking at the 5-year performance chart below paints a clearer picture, where whopping 3-digits % gains are the norm. Again the 'creams of the crop' are NVDA +936.23% and AMD +726.39%. GFS gains, the 'new-kid on the block' which IPO-ed in Oct 2021, pale in comparison with the leaders.

% Gain – Prices of Top Semis Stocks 5-Year 2017–2022

Crème de la Crème

NVDA would likely erase its –6.31% drop YTD and surge higher, just as it has done in past years. Its new hardware and software offerings to power AI, robotics and its Omniverse platform (announced at GTC Conference in Mar 2022), should provide sufficient catalysts to fuel a spectacular growth and capital gains. The nearest challenger if NVDA suffered a calamity is AMD, even if at start of the year, it too stumbled 21% before recovering.

So there we have it, in my view, the crème de la crème or best of the best semis stock for Capital Gains to invest in 2022 is: $NVIDIA Corp(NVDA)$. 

I'd add that it'd probably be the envy of its competitors and investors alike, just like the root of its name, ‘invidia’, aptly meaning to be ‘looked upon with envy’, in Latin. Would you bet on NVDA or other semis stock? I'd love to know, leave your comments below...