The semiconductor sector is a critical component of the global technology landscape, powering everything from smartphones and computers to cars and industrial machinery. This industry is characterized by its cyclicality, with periods of high demand followed by times of oversupply which can impact prices and profitability. Semiconductor stocks are influenced by various factors including technological advancements, production capacity, global supply chains, and regulatory environments.
Investing in semiconductor stocks offers significant opportunities due to the sector’s pivotal role in technological innovation and its influence on numerous other industries. As technology evolves, the demand for advanced chips and components escalates, potentially yielding high returns for investors. However, this sector is also known for its volatility. Issues like chip shortages or surplus, changes in consumer electronics demand, and geopolitical tensions can greatly affect stock prices.
On the downside, the semiconductor industry requires high capital expenditure for research, development, and fabrication facilities. This can potentially constrain profitability, especially for smaller players. Additionally, the industry’s growth can be hampered by rapid changes in technology, requiring constant investment in research and development to stay competitive. Despite these challenges, semiconductor stocks remain attractive for growth-oriented investors. Taking this into consideration, here are two semiconductor stocks to watch in the stock market today.
Semiconductor Stocks To Watch Right Now
- Taiwan Semiconductor Manufacturing Company Ltd. (NYSE: TSM)
- Advanced Micro Devices Inc. (NASDAQ: AMD)
Taiwan Semiconductor Manufacturing Co. (TSM Stock)
To initiate, Taiwan Semiconductor Manufacturing Company Ltd. (TSM) is one of the world’s leading semiconductor foundry. The company specializes in the manufacturing of a wide spectrum of integrated circuits and related services. Additionally, TSMC provides semiconductor manufacturing services for a variety of applications ranging from consumer electronics to industrial and automotive uses.
Early last month, Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) announced its financial results for May 2024. The company reported a consolidated revenue of approximately NT$229.62 billion (about $7.1 billion USD). This marks a 2.7% decrease from April 2024 but a substantial 30.1% increase from May 2023.
In 2024 so far, shares of TSM stock have surged higher by 79.74% YTD. While, during Friday’s pre-market trading session, TSMC stock is trading higher by 1.41% at $185.07 a share.
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Advanced Micro Devices (AMD Stock)
Next, Advanced Micro Devices Inc. (AMD) is a multinational semiconductor company. The company develops computer processors and related technologies for business and consumer markets. Notably, AMD’s product lineup includes desktop and server processors, graphics cards, and technology for gaming consoles. This positions AMD as a player in both the PC and server markets.
Just last month, Advanced Micro Devices Inc. announced a partnership with Sun Singapore Systems Pte. Ltd. to deploy a new AI-based smart parking solution in Singapore, powered by AMD’s Zynq™ UltraScale+™ MPSoC devices. This technology will enhance the accuracy of vehicle license plate recognition and support advanced features like vacancy detection, jam and accident detection, and parking violation enforcement.
Year-to-date, shares of AMD stock have gained by 18.27% thus far. Meanwhile, during Friday’s pre-marketing trading session, Advanced Micro Device’s stock is trading slightly higher by 0.31% at $163.90 per share.
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