Investors should closely watch these solid semiconductor companies with upside potential
The technology industry has been booming, especially over the last year. This is primarily due to the increased attention surrounding generative artificial intelligence (AI) and similar technologies. The production of semiconductors is crucial to the development of innovative technologies.
Along with being vital to technological advancement, semiconductors are just as important to our everyday lives. They make our smartphones, cars and computers function.
A few stocks within the semiconductor industry share impressive price appreciation and offer strong long-term growth potential. Let’s explore some great options for investors seeking to gain exposure to this burgeoning industry.
ACM Research (ACMR)
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ACM Research (NASDAQ:ACMR) primarily sells cleaning equipment for integrated circuits. It also provides electrochemical plating and thermal deposition services.
Over this past year, its share price has increased by 175%. That was primarily due to its most recent earnings results, which greatly exceeded analysts’ expectations.
On Feb. 28, ACM Research released its Q4 earnings of full year 2023. It stated that total revenue increased by 57% to $170 million. And earnings per share more than doubled from nineteen cents per share to forty-three cents year-over-year (YOY).
Directly following this earnings report, ACMR’s stock price increased by over 40% because it beat analysts’ predictions for revenue and earnings per share by a fair margin.
ACMR provided revenue estimates for the full year 2024 of between $650 million and $725 million. In addition, the total revenue for the full year 2023 was $558 million.
Recently, the company released preliminary unaudited revenue and shipment results for the Q1 of 2024. It revealed that revenue and shipments are expected to increase by 103% to 105% and 163% to 165% YOY, respectively.
Therefore, ACMR is a sturdy buy semiconductor company that draws in investors due to its healthy growth metrics.
Taiwan Semiconductor Manufacturing (TSM)
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Taiwan Semiconductor Manufacturing (NYSE:TSM) is a leading producer of semiconductor devices used in smartphones, high-performance computing and other electronics.
On Apr. 18, TSM reported Q1 earnings of 2024. The total revenue increased by 17% and net income rose by 9%. And, it announced expected earnings for Q4 of 2024, with anticipated revenue between $19.6 billion and $20.4 billion.
Taiwan Semiconductor Manufacturing is also experiencing impressive share price appreciation. For example, within the last year, it has increased by 67%.
Moreover, TSM has benefited due to the influx of investors’ attention towards generative AI. The company offers investors impressive growth capabilities. And it anticipates a strong growth rate over the next several years, particularly within its high computing and automotive segments.
Offering solid growth metrics, TSM is the second largest company in the sector by market cap behind Nvidia (NASDAQ:NVDA).
Impinj (PI)
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Impinj (NASDAQ:PI) uses its wide array of integrated circuit technology to provide a cloud connectivity platform. Its applications include industries such as retail, logistics, healthcare and industrials.
Over the past year, Impinj’s share price has increased by 73%, primarily due to a positive earnings report for the first quarter. This has investors rushing to buy shares.
On Apr. 24, PI dropped earnings results for Q1 of 2024. That showed a net loss of $4 million for Q1 2023 was reported. And for Q1 2024, it increased to net income of $33 million. Total revenue decreased by 10% YOY. This year’s second quarter outlook expects total revenue to range between $96 million and $99 million.
Despite experiencing a decrease in total revenue YOY, Impinj still beat analysts’ expectations for first quarter earnings. And that sent the stock price higher by nearly 30%.
Thus, Impinj is a strong semiconductor stock buy that investors should keep their eye on. With projected revenue for Q2 improving over Q1, expect share price appreciation.
As of this writing, Noah Bolton did not hold (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.
