Why Nvidia, AMD, Chip Stocks Are Seeing Big Gains Today Amid Earnings

The industry’s long-term demand trajectory remains strong, fueled by the relentless need for more sophisticated semiconductors in emerging technologies. However, challenges such as supply chain disruptions and geopolitical tensions have introduced a degree of volatility, with the U.S.-China tech rivalry impacting global supply chains and investment patterns. The semiconductor industry is on a transformative growth path, marked by an increasing demand from sectors like technology, automotive and consumer electronics. Computers, smartphones and smart TVs have become household items for millions of people around the world, and companies that design and develop semiconductors are the key catalysts driving that change. You can cash in on these new waves of innovation by investing in semiconductor stocks today.

ASE Tech Holding Co. (ASX)

• Intel’s competitive advantage is multifaceted, stemming from its integrated design and manufacturing model, which allows for a rapid response to market changes and customer needs.
• Hardware, such as PC and laptop chips, tends to become a commodity as the years progress and more advanced chips come out.
• With its commitment to innovation and quality, TSM has established itself as a key player in the semiconductor industry, continuously advancing the frontiers of process technology.
• From 2021 through 2023, Taiwan Semiconductor spent nearly $100 billion on property plant and equipment.
• Founded in 1988, MIC Electronics is a manufacturer of electric lighting equipment.

Despite the cyclical nature of the semiconductor industry, Micron has managed to navigate market fluctuations successfully, maintaining healthy profit margins and cash flow. This financial resilience is crucial for sustaining high levels of investment in research and development and is essential for staying competitive in the fast-evolving tech landscape. Additionally, Micron’s strategic management of supply chain and production capabilities has helped it mitigate the impacts of global semiconductor shortages, underscoring its operational excellence. Diversification is particularly important when investing in semiconductor stocks. The industry encompasses various companies specializing in different segments, such as manufacturing, equipment and design. By spreading investments across various sub-sectors, investors can reduce risk.

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From 2021 through 2023, Taiwan Semiconductor spent nearly $100 billion on property plant and equipment. For 2024 and 2025, the Value Line forecast is $35 billion and $50 billion, respectively. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Huang believes AI is increasingly becoming a commodity, and these AI factories are pivotal in accelerating demand for generative AI training and inference. They are essential for consumer internet companies, automotive industries, healthcare sectors, and many other fields that require complex infrastructure to run their models on. While ASX definitely took it on the chin during late 2021 and early 2022, its modest size and more agile operations mean it can move a bit faster than some of its larger peers to capitalize on the strong outlook for the sector in 2024.

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Dixon Technologies is a multinational contract manufacturer of electronics like washing machines, televisions, smartphones, LED bulbs, etc. “Through those concerns, the earnings environment is likely to remain strong, for NVIDIA and for the whole AI complex,” the analysts said. Other stocks getting a lift included ASML (up 11%), Qualcomm (up 6%), and Samsung (up 4%).

Best semiconductor ETFs to buy right now

The semiconductor supply chain starts with fabrication (or “fab”) equipment manufacturers — the people who make the machines that semiconductor companies use to fabricate chips by embedding tiny circuits into semiconductor materials. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. AMD’s product portfolio includes x86 microprocessors for desktop, laptop and server markets and semiconductor products for gaming consoles and home media platforms.

Semiconductor stock ETFs

Investing successfully in semiconductor stocks requires a strategic approach that combines long-term perspectives, diversification and thorough research. Given the cyclical nature of the semiconductor industry, which experiences peaks and troughs based on demand for electronic devices and technological advancements, adopting a long-term perspective is crucial. This approach allows investors to weather short-term volatility while capitalizing on the industry’s growth trajectory.

Luckily for investors, TSMC just went on sale, and now could be the perfect time to add some shares to your portfolio. But with businesses going through digital transformation, the demand for chips shot from newer products like home IT equipment, smartphones, and recreational products like PlayStations and VR headsets. This meant that the semiconductor market had to transition from producing lower-cost car chips to expensive processors for consumer goods. It manages the flow of electricity in electronic products like smartphones, computers, electric vehicles, medical equipment and gaming hardware.

With advancements in artificial intelligence, 5G and the Internet of Things (IoT) driving demand, selecting the right semiconductor stocks can offer you significant returns. In this article, I delve into companies that not only lead the charge in innovation but also offer strong investment potential. From established giants to promising upstarts, these selections are based on a rigorous analysis of performance indicators, market position and future growth prospects. Financially, Micron demonstrates robust earnings growth and a strong balance sheet.

Declining demand in the manufacturing sector could mean a shaky future for the semiconductor companies that have highly sophisticated chip foundries around the world. “This tends to be a more forward-looking https://investmentsanalysis.info/ index,” said Richard de Chazal, an equity researcher at William Blair. Semiconductor stocks in India are suitable for tech enthusiasts, long-term investors, and those interested in the technology sector.

However, what makes UMC worth considering is its huge income potential, with an annual dividend that is approximately five times the S&P 500 right now. But if you’re patient and in it for the long haul, UMC is a semiconductor stock worth considering—particularly with its outlook of 16% revenue growth in the next fiscal year. While perhaps not quite as much a household name as other semiconductor stocks on this list, the strong outperformance of Lam Research in 2023 is proof that this is a company worth paying attention to. Speaking of “fabless” chipmakers, Qualcomm predominantly relies on third parties to produce its best-in-class semiconductor products for wireless communications. That includes a key design for smartphone leader Apple (AAPL), including chips that provide 5G connectivity for iPhones.

Today, only three foundries — Taiwan Semiconductor Manufacturing (TSM 6.13%), Samsung, and Intel — can manufacture the world’s smallest chips. TSMC is the largest and most technologically advanced of the three, and fabless chipmakers like AMD, NVIDIA (NVDA 6.13%), Qualcomm (QCOM 5.66%), and Apple (AAPL 1.66%) all rely on its plants to produce their newest 5nm and 7nm chips. So today I’ll walk you through four of the world’s most important chipmaking companies, and highlight why they could be great investments for the next decade.

A company’s return on invested capital (ROIC) indicates how well it’s able to generate profit from the cash it raises via debt and equity it receives. A high ROIC means the company is likely innovating strategically, improving operations to increase efficiency, and targeting secular growth trends with new chip designs. Jeff Reeves writes about investments, the stock market, exchange-traded funds and retirement topics. A veteran journalist with extensive capital markets Best semiconductor stocks experience, Jeff has covered Wall Street and investing since 2008. Beyond Forbes Advisor, his work has appeared in numerous respected finance outlets including CNBC, Fox Business, The Wall Street Journal digital network, Kiplinger, USA Today and CNN Money. Another option is to invest in semiconductors via semiconductor ETFs, which can give you exposure to dozens of semiconductor stocks in a single purchase, and often for much less than the cost of one NVIDIA share.