Do You Have These Semiconductor Stocks On Your List?
Semiconductor stocks have been on the radar of many investors in the stock market over the past couple of years. After all, companies within the industry have seen an exponential increase in revenue during the pandemic as digital transformation accelerated. Besides, the hike in chip prices is also fueled by supply chain pressures. It affected major industries such as consumer electronics, auto manufacturing, and many more. Ultimately, this prompted the Biden administration to incentivize chip manufacturing in the country in an attempt to decrease the country’s reliance on foreign chipmakers.
Meanwhile, semiconductor companies around the globe continue to expand their operations. For instance, Taiwan Semiconductor (NYSE: TSM) announced last month that it would collaborate with Sony Group (NYSE: SONY) to build a $7 billion chip plant in Japan. Now, Taiwan and Japan’s ruling parties have finally agreed to have “all round cooperation” on semiconductors and to hold regular talks. So, it should not come as a surprise that semiconductor stocks are heating up right now. With that said, would you be interested in a list of the top semiconductor stocks in the stock market today?
Best Semiconductor Stocks To Buy [Or Sell] This Week
- GlobalFoundries Inc (NASDAQ: GFS)
- Micron Technology, Inc (NASDAQ: MU)
- Applied Materials, Inc (NASDAQ: AMAT)
- Aehr Test Systems (NASDAQ: AEHR)
GlobalFoundries
First, we will be looking at the provider of semiconductor manufacturing services, GlobalFoundries. The company is redefining innovation and semiconductor manufacturing by developing feature-rich process technology solutions in pervasive high-growth markets. Essentially, it specializes in manufacturing processes, and differentiated transistor and device technology.
GlobalFoundries started December on a high note with the release of its third-quarter earnings report. Impressively, its revenue for the quarter improved to $1.7 billion, an increase of 56% year-over-year. Furthermore, the company’s gross profit skyrocketed to $300 million, representing an increase of 325% compared to the prior year’s quarter. All in all, the company’s third-quarter shows the ongoing acceleration of its strategy to lead in the pervasive semiconductor market.
Despite its strong financial showing, the company is not resting on its laurels. It recently announced that it has agreed to amend its Wafer Supply Agreement (WSA) with Advanced Micro Devices (NASDAQ: AMD). Under the agreement, GlobalFoundries will increase the volume of chips as well as extend the terms of the agreement to secure supply through 2025. AMD now expects to purchase approximately $2.1 billion of wafers from GF between 2022 and 2025. Given these exciting developments, would you buy GFS stock now?
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Micron Technology
Following that, we have a company that offers memory and storage solutions, Micron. Its portfolio includes dynamic random-access memory (DRAM), negative-AND (NAND), three-dimensional (3D) XPoint memory, and NOR. MU stock has been on a strong bullish momentum over the past week, rising more than 13% within the period.
Its current momentum is largely driven by its recent fiscal first-quarter earnings report. The company’s revenue was $7.69 billion compared to $5.77 billion for the same period last year. Meanwhile, its GAAP net income came in at $2.31 billion, or $2.04 per diluted share. Safe to say, this was yet another solid result that reflects its strong product portfolio momentum. So, as powerful secular trends such as 5G, AI, and EV continue to fuel demand growth, it places the company in a great position moving forward.
The company also believes that there will be ‘gradual improvement’ in the chip sector shortages next year. It is seeing a greater commitment and collaboration on supply planning. In fact, over 75% of its revenue came from volume-based annual agreements. This is a significant increase from half a decade ago when it accounted for around 10% of the company’s revenue. With that in mind, would you consider investing in MU stock right now?
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Applied Materials
Applied Materials provides manufacturing equipment, services, and software to the global semiconductor, display, and related industries. In detail, the company’s Semiconductor Systems focus on semiconductor capital equipment used for the chip-making process. Impressively, AMAT stock has risen by over 80% this year.
Last week, the company along with the Institute of Microelectronics (IME) announced a new phase of their research collaborations at the Center of Excellence in Advanced Packaging in Singapore. Under this agreement, both companies aim to accelerate the AI era of computing. So, they will work towards driving breakthroughs in heterogeneous integration and advanced packaging for semiconductor innovation.
On top of that, the company is also thriving as seen from its fourth quarter financial report. Applied Materials reported revenue of $6.12 billion, up 31% year-over-year. Also, its net income increased to $1.7 billion, an increase of 51% year-over-year. Well, we can see that the demand for the company’s products and equipment continues to grow during the pandemic. With such strong fundamentals, would you be adding AMAT stock to your portfolio?
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Aehr Test Systems
Lastly, we will be looking at Aehr Test Systems. For those unaware, the company engages in the design, engineering, and manufacturing of test and burn-in equipment used in the semiconductor industry. It manufactures and markets full wafer contact test systems, test during burn-in systems, test fixtures, and related accessories. These systems can be used to simultaneously perform parallel testing and burn-in of packaged integrated circuits (IC), singulated bare die, or ICs still in wafer form.
In November, Aehr announced that it joined forces with PowerAmerica Institute to accelerate the adoption of high-performing, next-generation silicon carbide and gallium nitride power electronics. Thus, it will be bringing these products to the market faster while reducing cost and risk factors associated with new generation technologies. Looking at the larger picture, this would benefit Aehr as it will have access to some of the brightest minds in wide bandgap technology.
Furthermore, the company also recently announced that it has received an order of four additional FOX-NP™ systems from a current silicon photonics customer. This customer is one of the world’s largest semiconductor manufacturers. The fact that it continues to use Aehr for wafer-level burn-in and stabilization of their silicon photonics wafers is a testament to the company’s product excellence. All things considered, would AEHR stock be worth watching?
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