3 Top Semiconductor Stocks To Add To Your Watch List Today
Many semiconductor stocks are thriving on the stock market this year, amidst the seemingly endless global chip shortage. Sure, the global chip shortage may be bad news for consumers trying to get their hands on the latest iPhone or companies simply looking to manufacture the latest electric vehicles (EV). But it has been great news lately for investors looking to invest in top semiconductor stocks, nonetheless.
Now, the supply of chips may not seem to be catching up with demand just yet. And it is understandable why investors are revisiting the space. After all, some would say that semiconductors are the backbone to technologies such as the metaverse, artificial intelligence (AI), augmented reality (AR), and electronic vehicles, just to name a few. You could even leverage an ETF like VanEck Vectors Semiconductor ETF (NASDAQ: SMH) to have an exposure in this growing sector. To provide some context, this ETF boasted gains of more than 35%, outperforming the year to date 24% from the S&P 500.
Last week, Micron Technology (NASDAQ: MU) and United Microelectronics Corp (NYSE: UMC) reached a global settlement following a years-long intellectual property dispute. Prior to this, Micron also received favorable comments from two Wall Street analysts. Those two upgrades have turned MU stock into one of the most discussed stocks on Reddit’s WallStreetBets. Of course, investors should not blindly follow these upgrades, but does the market’s renewed interest in the memory chipmaker make it a top semiconductor stock to buy? If not, would this list of these top semiconductor stocks to watch be worthy of your attention?
Best Semiconductor Stocks To Watch In The Stock Market Now
- Nvidia Corporation (NASDAQ: NVDA)
- Qualcomm Incorporated (NASDAQ: QCOM)
- Advanced Micro Devices, Inc. (NASDAQ: AMD)
Nvidia
Think graphic cards, and many will think of Nvidia. Nvidia positioned itself in the market as the inventor of the graphics processing unit (GPU) and has managed to keep its place as one of the leaders in the semiconductor industry over the years. The company’s products include its popular GeForce graphics card line and the Nvidia Shield Android TV streaming box.
In recent years, Nvidia also ventured into deep learning, a subset of artificial intelligence (AI) and machine learning that uses multi-layered artificial neural networks to deliver state-of-the-art accuracy in tasks such as object detection and speech recognition. The company’s latest version of its GauGAN technology, which uses deep learning, is capable of turning words into realistic images. With these innovations, it’s understandable why many investors want a piece of NVDA stock. In fact, NVDA stock price has skyrocketed more than 140% year-to-date. Of course, after such a huge run in its stock price, many are wondering if NVDA stock is still a smart buy.
From its third fiscal quarter results, Nvidia reported record revenue of $7.1 billion, up by 50% year-over-year. Founder and CEO Jensen Huang said that demand for Nvidia’s AI technology is surging, driven by hyperscale and cloud scale-out, and broadening adoption of the technology by more than 25,000 companies. The company expects its revenue to reach $7.4 billion during the last fiscal quarter of the year. More impressively, Nvidia’s dominance in the accelerated computing space also made it a key player in the several megatrends, from AI to robotics and the metaverse. Considering all this, would NVDA stock make your list of best semiconductor stocks to buy now?
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Qualcomm
Smartphones with Qualcomm‘s semiconductor chips are often the first choice for many. The company plays a crucial role in developing foundational technologies which smartphones rely on. It is also one of the leading 5G chip makers in the world and is an active proponent of 5G technology.
What’s more, Qualcomm has a number of high-profile clients from various industries. The company recently announced that it will collaborate with long-time partner BMW (OTCMKTS: BMWYY) to provide technology for the German carmaker’s next generation of advanced driver-assistance systems and automated driving platforms. Of course, it’s not just smartphones and cars that use Qualcomm chips. The Oculus Quest 2 VR headsets from Meta Platforms (NASDAQ: FB) are also powered by Qualcomm.
Earlier this month, Qualcomm said that its fourth fiscal quarter revenue came to $9.3 billion, up by 43% year-over-year. Its chip business posted $7.7 billion in revenue, a rise of 56% year-over-year. Qualcomm attributed the growth to strong demand for chips for smartphones and handsets. CEO Cristiano Amon displayed the company’s big ambition for the metaverse. He said that the company plans to focus more on IoT Next. This is the new frontier of the Internet of Things, which notably includes the metaverse. Whether we like it or not, the metaverse trend is only going to continue in 2022, and it’s here to stay. Given all this, would you agree that QCOM stock is the stock to play the metaverse trend?
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Advanced Micro Devices
Advanced Micro Devices or AMD is an established name in the semiconductor industry. Its graphics card AMD Radeon PRO Graphics is used in Apple‘s (NASDAQ: AAPL) computers and laptops. Apart from GPUs, the company’s processors are used in many modern devices. AMD also offers data center solutions, which include cloud computing and data analytics services.
The company was in the spotlight this month after landing Meta Platforms as its data center chip customer. Meta joins AMD’s other illustrious clients such as Google’s parent company Alphabet (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN). Not one to rest on its laurels, AMD launched the new Instinct™ MI200 series accelerators earlier this month. The company believes this is the world’s fastest accelerator for high performance computing and artificial intelligence workloads.
AMD’s third fiscal quarter earnings reflect the recent developments surrounding the company. It recorded $4.3 billion in revenue, up by 54% year-over-year and 12% quarter-over-quarter. The company attributes the increase to higher revenue in both the Computing and Graphics segment and the Enterprise, Embedded and Semi-Custom segment. AMD said that it expects full-year revenue for 2021 to increase by 65%. This is a revision from prior guidance of 60% revenue growth. With that in mind, would you be watching AMD stock in the stock market today?
