Top 5 Best Semiconductor Stocks to Watch in 2024
Semiconductors (and hence semiconductor stocks, or chip stocks) are considered to be the most crucial component of every technological end market.
Should you be trading and/or investing in what can possibly be considered the best semiconductor stocks on the market? What are the top 5 best semiconductor stocks for 2024?
This article will outline potentially the best semiconductor stocks for 2024, explaining also how you can trade and invest in the companies you may find suitable for your portfolio.
Are you interested in learning more about the thriving semiconductor vertical? If so, let's get started.
Table of Contents
What are Semiconductor Stocks?
The demand for various technologies in our world today, whether that be Electric Vehicles, Artificial Intelligence, mobile devices, among others, has been on a huge incline since the pandemic and up into the beginning of 2024.
To put it simply, semiconductor companies are the design and manufacturing forces which develop the core functions behind the overall (and vast) electronic industry.
This subsequently means that semiconductor equipment like microprocessors and chips are in short supply.
The year 2021 as a whole saw an increase in semiconductor sales. In just October 2021 alone, sales hit $48 billion – an increase of 24% from October 2020. Semiconductor sales totalled US$580.13b in 2022, a 4.4% year-on-year growth rate for the year.
While 2022 saw much growth for the semiconductor industry, the year 2023 was more volatile for semiconductor stocks.
The global semiconductor sales by the end of 2023 was $527 billion, a 'minor' drop from the year 2022's final number.
As we are now in the first quarter of 2024, semiconductor stocks were generally in decline at the beginning of January.
However, now in February 2024, semiconductor stocks are again surging; for example, on February 13, 2024, leading chip company, Nvidia, trumped Amazon in overall market value.
Nvidia closed at a market value of $1.78 trillion, where Amazon closed at $1.75 trillion. A seemingly 'small' feat, albeit quite historic.
From a long-term perspective, semiconductors will likely remain prevalent in the development of technology hence semiconductor stocks may remain competitive.
Additionally, with Metaverse stocks a growingly popular topic, as Artificial Reality (AR) and Virtual Reality (VR) offerings are advancing, this will only put more pressure on the semiconductor industry.
When defining ‘what are semiconductor stocks’, we first should sum up the industry behind these companies.
Please also keep in mind, that if you haven't already, you can sign up for free with Admiral Markets and begin live trading today:
Who is the Biggest Semiconductor Maker?
According to CompaniesMarketCap, as of February 2024, NVIDIA holds the top spot as the largest semiconductor company by market cap, with US$1.816 trillion.
NVIDIA is a global tech company which designs and manufactures GPUs (Graphic Processing Units), which are a crucial component of any semiconductor.
TSM is in second with a market cap of US$670.96 billion.
TSM both designs and manufactures semiconductors, giving them much flexibility and capability to dominate the market. TSM trades both on the New York Stock Exchange (NYSE) and Taiwan Stock Exchange (TWSE).
Are Semiconductor Stocks Good to Trade or Invest in?
As always, this kind of question always poses a subjective answer. Also, be sure you understand the difference between trading and investing.
In the most general sense, one may say given the current state of the tech industry, that yes, semiconductor stocks, or chip stocks, are a plausible trading or investment product.
These kinds of questions require a subjective answer for the simple fact that everyone's industry knowledge and risk tolerance are different.
For a trader or investor who focuses on both various and overall tech industries, it would make sense to pay attention to the well-performing and upcoming semiconductor stocks.
If you feel this is an area that may be suitable for your portfolio, you have the option to both trade and invest in various semiconductor stocks through the well-known platform, MetaTrader 5.
If you are registered as an Admiral Markets client, you have free access to this tool, among others.
Feel free to click the banner below to download it today:
What are the Top 5 Best Semiconductor Stocks 2024?
When reviewing the top 5 best semiconductor stocks, below, it is important to keep in mind that the stocks were chosen based on the methodology of the author.
Based on the macro-economic environment, the following chosen stocks are the ones potentially foreseen to have the most viable solutions in the market and hence, the most growth potential.
1. NVIDIA (NVDA)
Nvidia has been a top stock on many investors' watchlists for various reasons, as its pioneered chip tech in graphic processing units (GPUs) takes an effect on mostly all thriving industries currently.
- Nvidia aims to impact the Metaverse with proprietary applications, such as the Omniverse software.
- Nvidia currently supplies Amazon (AMZN) with chips for its Web Services.
- Nvidia designs and manufactures chips for cryptocurrency mining, known as cryptocurrency mining processors, or CMPs.
- On the contrary of the positives, Nvidia will likely face increased competition in the near future.
There are many more newsworthy points to add to the case of Nvidia.
Does Nvidia have a place on your list of best semiconductor stocks? Trade the CFD or Invest today.
2. Taiwan Semiconductor Manufacturing Co Ltd (TSM)
As it may come as no surprise, TSM takes the second spot for best semiconductor stock, given they have the majority global share of the market.
If you decide to pay attention to this market sector, this could be seen as a staple for a long-term investment portfolio, given their capital expenditures plan to continue dominating market share, as shown below:
According to Yahoo!Finance as of February 2024, TSM's 52-week range ranges from $81.21 - 135.71. What does this tell us?
- The stock is somewhat volatile (reflecting that of its industry), generally ideal for short-term trading positions.
- Given the industry projection as a whole, the stock entry price for a long-term investment is reasonable.
- On the contrary, the cyclicality of the semiconductor market can make future earnings uncertain.
Would you add TSM as one of your best semiconductor stocks? Trade the CFD or Invest today.
3. Intel Corp (INTC)
Given Intel's well-known reputation and the fact that it is one of the world's main chip manufacturers, it is certainly worth in the second top spot for best semiconductor stocks in 2024.
What other reasons should we consider?
- According to Zacks.com, Intel has a trailing-12-months P/E (Price / Earnings) of 8.80X (compared to a 25.23X of the general Semiconductor industry rate). The 8.80X of Intel shows the stock could be undervalued.
- As of February 2024 on Yahoo!Finance, INTC's price sits around $43, with a 52-week range of $24.59 - 51.42, meaning the current price could be a good entry point.
- To give an equal pro and con viewpoint, Intel has had its fair share of rallies and selloffs over the years.
Will you add Intel to your list of best semiconductor stocks for the short- or long-term? Trade the CFD and Invest in INTC now.
View the below chart from the TradingView widget in order to better understand the Daily price fluctuations of the Intel stock:
*Past performance is not representative of future results.
4. Advanced Micro Devices Inc (AMD)
AMD has been a strong competitor as a rival semiconductor company; however, they have a slightly different business process.
It is known as one of the main semiconductor companies that went 'fabless', meaning AMD outsources the manufacturing of its processors, unlike the preceding companies mentioned in this article.
Does the decision to go fabless act in the company's favour, lowering their capital costs, and allowing them to focus on strictly development?
- As shown in Yahoo!Finance's AMD Financials, Total Revenue has risen substantially from 2020 to 2023, compared to the steadier and more gradual rise in the Cost of Revenue – Likely thanks to the move of outsourcing.
- AMD's CEO, Lisa Su, is constantly improving the speed and performance of the nanometer scale – Beyond that of its rival, Intel (7-nanometer, compared to 10-nanometer).
- On a contrary note, AMD has faced accusations of a lower-quality product in the past.
Is ADM on your watchlist as one of the best semiconductor stocks 2024? Trade the CFD or Invest now.
5. Micron (MU)
Lesser known than its competitors, Micron could be a hidden gem of a semiconductor stock pick.
A global leader and maker of memory and storage products (specifically dynamic random access memory, or DRAM), Micron has seen a sizeable increase in demand as memory chips are needed both for cloud computing and 5G networks.
- According to CNN Money, as of July 25th, 2023, the price forecast for the next 12 months is a high of $100 and a low of $45.
- If you see Micron's 5-year chart, the long-term growth, although volatile, is gradual growth – particularly in 2021 and 2022. The volatility in the short-term expresses there are many options for trading, especially when you can both Buy and Sell on both price directions (as with CFD trading).
- Adversely, the need for DRAMs has decreased as Cloud solutions become more popular - DRAMs being the core offering of Micron.
Do you think Micron deserves a spot on the list of best semiconductor stocks? Trade the CFD and Invest in Micron today.
What is the Best Semiconductor ETF?
Whether short-term ETF trading or investing in ETFs for the long term, both can have a viable place in your portfolio and strategy.
ETFs can be a good option for investors, as each ETF encompasses multiple assets which are generally relevant to each other based on the industry, for example in the case of the semiconductor industry and hence semiconductor stocks.
There are quite a few Semiconductor ETFs on the market – But which one is the Best Semiconductor ETF?
The first up, at $14,687.9($MM) in total asset value is VanEck Vectors Semiconductor ETF (SMH). This fund tracks the overall performance of the top 25 US-listed Semiconductor companies, making it a diverse option in this vertical.
You can trade the SMH ETF CFD on both price directions.
The second runner-up is the iShares PHLX Semiconductor ETF (SOXX) with a total asset value of $11,929.8($MM).
You can Buy (or Sell) the SOXX ETF CFD at Admiral Markets as well.
The last of the top 3 best semiconductor ETFs would be Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL), with a total asset value at $9,193.9($MM).
Are Semiconductor Stocks a Buy?
The semiconductor industry, specifically referring to semiconductor stocks, is a large, broad world with many companies involved – companies which design and manufacture products which are crucial to our way of modern living.
As I wrote in the opening statement of this article, semiconductors are truly the backbone, or brains, of every single piece of technology we use.
Are you investing or trading semiconductor stocks? What do you consider to be the best semiconductor stocks on the market today?
Start your trading journey today with Admiral Markets – You can easily register a free demo account, and move to a live account with real capital when you are comfortable. Click below to register:
Will semiconductor stocks go up in 2024?
As with any stock, it's impossible to dictate future performance. So far in 2024, semiconductor stocks have remained quite volatile and on a slight decline compared to 2022. It is a sector worth monitoring throughout 2024 for potential trading or investment options.
What are the top best semiconductor stocks?
While the answer is always subjective, the top 3 best semiconductor stocks by market cap would include NVIDIA Corp, TMD and Samsung.
Other articles you may find interesting:
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets and Admiral Markets trademarks (hereinafter “Admiral Markets”). Before making any investment decisions please pay close attention to the following:
1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
4. The Analysis is prepared by an independent analyst (hereinafter “Author”) based on the Brandie E Blackler, Financial Analyst personal estimations.
5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
