While it’s easy to get locked into semiconductor stocks to buy thanks to the mercurial rise of Nvidia (NASDAQ:NVDA), there’s more to the sector than just one enterprise focused on artificial intelligence. Fundamentally, the chip-manufacturing ecosystem is enticing because it represents the building blocks of innovation.
With progress always pointing in one direction – forward – investors ought to concentrate the growth portion side of their portfolio on semiconductor stocks to buy. Basically, the canvas provides the hardware by which various technologies will sprout. That’s not to say you can blindly jump aboard the sector. However, this arena offers a greater probability of success than arguably most other competing sectors.
The numbers are mouthwatering. According to Fortune Business Insights, the global semiconductor market reached a valuation of $611.35 billion last year. Experts project that by 2032, the sector could be worth over $2.06 trillion. If so, that would imply a compound annual growth rate (CAGR) of 14.9%.
You’re not going to find too many markets that offer that kind of growth. With that, below are enticing semiconductor stocks to buy.
Intel (INTC)
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Once one of the juggernauts among semiconductor stocks to buy, Intel (NASDAQ:INTC) is almost treated nowadays as an afterthought. Unfortunately, the enterprise struggled with both internal and external shortfalls. Admittedly, it has fallen behind in certain key areas. Nevertheless, it commands a powerful brand reputation. It could also be poised for a comeback.
Sure, analysts overall are rather pensive on INTC stock, rating it a consensus hold. However, the average price target of $40.31 implies a nearly 32% upside potential. Plus, the most optimistic target calls for a per-share price of $100. Financially, during the trailing 12 months (TTM), Intel posted net income of $4.07 billion or 97 cents per share. Revenue during this period landed at $55.24 billion.
For fiscal 2024, covering experts see earnings per share rising 3.8% to $1.09. On the top line, sales may see a 2.9% bump to $55.8 billion. That’s rather modest. However, in fiscal 2025, EPS could fly to $1.95 on revenue of $62.64 billion. Combined with a forward dividend yield of 1.63%, INTC deserves some consideration for semiconductor stocks to buy.
Qualcomm (QCOM)
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A top-tier name among specialist chip manufacturers, Qualcomm (NASDAQ:QCOM) focuses on wireless connectivity solutions. As well, it’s also a relatively silent or underappreciated player in the digital intelligence game. Yes, Nvidia dominates the AI segment overall. However, such protocols are consuming energy at an alarming rate. Qualcomm is busy developing high-efficiency chips that may help address this consumption risk.
As a holistic business opportunity, Qualcomm hasn’t gone unnoticed. Analysts rate shares a consensus moderate buy. At the same time, QCOM stock gained nearly 62% since the start of the year. That means the average price target among experts sits at $198, implying almost 13% downside risk. However, the most recent targets call for positive growth. Further, the most optimistic view stands at $245.
Financially, Qualcomm posted net income of $8.45 billion, translating to EPS of $7.49. Revenue in the cycle hit $36.41 billion. For fiscal 2024, analysts anticipate robust expansion of nearly 18% to $9.93 EPS. On the top line, sales may rise 7.2% to hit $38.42 billion. The company also provides a forward yield of 1.5%, making it one of the attractive semiconductor stocks to buy.
Applied Materials (AMAT)
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Based in Santa Clara, California, Applied Materials (NASDAQ:AMAT) falls under the semiconductor equipment and materials sector. Per its public profile, Applied engages in the provision of manufacturing equipment, services and software to the semiconductor, display and related industries. It’s one of the critical “stagehand” enterprises that keep the tech ecosystem flowing.
It also hasn’t gone unnoticed by Wall Street analysts, who rate AMAT stock a consensus moderate buy. However, the market also has its eyes on Applied, sending shares up almost 61% since the beginning of January. As a result, the average price target of $239.91 implies more than 3% downside risk. However, on the positive side, the most optimistic view calls for $280 per share.
Financially, during the TTM period, the company posted net income of $7.3 billion or $8.70 per share. Revenue in the cycle reached $26.5 billion. For fiscal 2024, EPS may rise modestly by 4.2% to $8.39 on sales of $26.94 billion. However, the big boom can happen in fiscal 2025, when EPS potentially runs to $9.69 on revenue of $30.02 billion.
ASML (ASML)
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One of the most important semiconductor stocks to buy, ASML (NASDAQ:ASML) falls under the computer chip equipment and materials segment. Per the corporate profile, ASML produces, sells and services advanced semiconductor solutions. Among these specialties is deep ultraviolet lithography, which allows enterprises to print complex patterns on silicon wafers. Given the essential nature of the aforementioned business, ASML deserves a close look.
Not surprisingly, analysts rate shares a unanimous strong buy. While the average price target of $1,102.25 doesn’t imply much growth, it’s always possible for experts to modify their ratings based on present market dynamics. Financially, during the TTM period, ASML posted net income of $7.11 billion or $19.32 per share. Revenue reached $26.1 billion in the cycle.
For fiscal 2024, covering experts see a slight dip in EPS to $20.51. Further, revenue growth may be modest, up only 1.4% to $29.81 billion. However, fiscal 2025 could be a completely different story. By then, EPS could soar to $32.10. Also, revenue may jump 32.4% to hit $39.46 billion. Further, the blue-sky target calls for $42.81 billion.
GlobalFoundries (GFS)
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Based in Malta, New York, GlobalFoundries (NASDAQ:GFS) belongs on your list of semiconductor stocks to buy for the long haul. According to its public profile, GlobalFoundries provides a range of mainstream wafer fabrication and technologies. It builds various semiconductor devices, including microprocessors, mobile application solutions and network-related chips.
One of the core consequences of the Covid-19 crisis was of course the semiconductor supply chain disruption. Further, a realization occurred in that enterprises and agencies saw the vulnerability of having fabrication services conducted mainly in one region of the world. By bringing the foundry business closer to home – or at least diversifying the process – the entire value chain could benefit.
To be fair, analysts are not really looking for much this fiscal year. Indeed, EPS is projected to fall more than 40% to $1.34. On the top line, sales may erode 9.1% from last year’s print of $7.39 billion to $6.72 billion. However, fiscal 2025 could see a turnaround, with EPS rising to $2.05. Moreover, sales could pop to $7.66 billion.
SkyWater Technology (SKYT)
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Headquartered in Bloomington, Minnesota, SkyWater Technology (NASDAQ:SKYT) operates as a pure-play technology foundry. According to the underlying corporate profile, SkyWater offers development, manufacturing and packaging services in the U.S. Again, the company benefits from the same fundamental factors as GlobalFoundries: it’s bringing the business closer to home and also providing sourcing diversification.
Financially, SkyWater posted a net loss of $32.21 million or 70 cents per share in the red. During this time, however, it managed to generate $300.22 million in sales. Its current quarterly revenue growth rate stands at 20.5%. Enticingly, SKYT trades at 1.2X trailing-year sales. Just in the three months ended March 31, shares were trading hands at 1.61X revenue.
For fiscal 2024, analysts believe that SkyWater will incur a loss per share of 34 cents. Admittedly, that’s an unfavorable expansion from last year’s 17 cents in the red. Still, revenue may rise 16.7% to hit $334.56 million. And fiscal 2025 sales could jump again to $370.5 million. It’s one of the semiconductor stocks to buy, with analysts rating it a unanimous strong buy.
Pixelworks (PXLW)
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The riskiest idea among semiconductor stocks to buy on this list (at least in my opinion), Pixelworks (NASDAQ:PXLW) presents an intriguing profile. According to its profile, Pixelworks provides video and pixel-processing semiconductors and software. It also provides digital displays, projection devices and digital signage. It’s one of the top-tier players in the form of entertainment broadcasting.
To be clear, PXLW stock is priced just under a buck at time of writing. Again, the emphasis here is that it’s a high-risk, high-reward idea. Part of what makes Pixelworks so enticing is that the experts love it. Among those who cover the enterprise, it features a unanimous strong buy rating. Also, the average price target lands at $2.50, which implies over 160% upside potential. The high-side target calls for $3.
During the TTM period, the company posted a net loss of $21.85 million or 39 cents a share in the red. However, it did generate $65.77 million in sales. Currently, its quarterly revenue growth rate stands at 61.1%. Finally, while fiscal 2024 calls for a down year, fiscal 2025 could see sales rise to $75.73 million. If so, that would imply 48.1% growth.
If you can handle the heat here, PXLW stock could be a tempting idea.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
