We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Stocks to Consider as the Semiconductor Market Rebounds
Read MoreHide Full Article
After enduring a downturn, the semiconductor industry seems poised for a substantial resurgence as global sales steadily pick up momentum. A period of sluggishness due to various economic challenges and supply-chain disruptions appears to be receding, paving the way for a significant rebound.
Despite year-over-year declines, the recent sequential monthly surge in semiconductor sales indicates a promising trajectory. The Semiconductor Industry Association reported a 3.9% month-over-month increase in global semiconductor sales, reaching $46.6 billion in October.
This sequential monthly growth trend has persisted for eight consecutive months, signifying a robust recovery. The resurgence also follows a strong third quarter of 2023 when sales escalated by 6.3% from the previous quarter to $134.7 billion.
The semiconductor market faced hurdles due to pandemic-induced supply-chain disruptions and the Federal Reserve's stringent monetary policy, dampening demand and triggering a decline in sales. However, with inflation subsiding and demand steadily recovering, the industry has witnessed an upward trajectory since the second quarter of 2023.
Forecasts for 2024 paint an optimistic picture, expecting sustained demand to propel sales growth. The World Semiconductor Trade Statistics projects an impressive 13.1% rebound, anticipating global sales to reach $588.4 billion. Additionally, the technology research firm IDC foresees remarkable 20.2% year-over-year growth, primarily fueled by heightened demand from artificial intelligence (AI) server and endpoint device manufacturers.
Furthermore, long-term prospects remain strong for the industry as semiconductors are the backbone of the current-day technology-driven economy. Digitization across industries, the adoption of cloud computing and the integration of AI and machine learning are expected to fuel demand for semiconductors.
The accelerated deployment of 5G technology — the next-generation wireless revolution — is likely to propel further growth. Apart from this, blockchain, the Internet of Things (IoT), autonomous vehicles, augmented reality/virtual reality and wearables are other growth prospects.
As the industry gears up for this anticipated resurgence, the semiconductor sector appears poised to reclaim its growth trajectory, driven by an upsurge in demand across various technological domains. Here, we have picked four semiconductor stocks — Photronics (PLAB - Free Report) , NVIDIA (NVDA - Free Report) , Qorvo (QRVO - Free Report) and ASML Holdings (ASML - Free Report) — that can boost portfolio return in 2024.
Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high-precision quartz plates that contain microscopic images of electronic circuits. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Photronics has been benefiting from its growth strategy to invest in technology, which drives market megatrends and helps build strategic partnerships with customers by signing long-term purchase agreements. The rising demand for AMOLED displays due to their increasing necessity in the smartphone market is driving the company’s flat panel display business growth.
Its IC business is witnessing strong growth, primarily driven by the solid demand for photomasks globally. High-end demand is led by foundries in Asia and the United States as the semiconductor content in consumer goods continues to increase. Additionally, Photronics’ bottom line is benefiting from strong demand for semiconductors in high-growth margin industries like automotive and electronic appliances and advances in the communication industry, such as the rollout of 5G.
Photronics’ expected earnings growth rate for fiscal 2024 is 27.5%. The Zacks Consensus Estimate for fiscal 2024 earnings of $2.60 per share has improved 15.6% over the past 60 days. Shares of the company have surged 92.7% year to date.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA is benefiting from growing investments in generative AI. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. Considering surging AI investments across the data center end market, NVDA expects its fourth-quarter fiscal 2024 revenues to reach $20 billion from $6.05 billion in the year-ago quarter.
NVIDIA is dominating the market for AI chips. The company’s GPUs are already being applied in AI models. This is expanding NVDA’s footprint in untapped markets like automotive, healthcare and manufacturing. Collaborations with Mercedes-Benz and Audi are likely to advance NVIDIA’s presence in autonomous vehicles and other automotive electronics space.
The stock currently carries a Zacks Rank #2 (Buy). The consensus mark for fiscal 2024 earnings has been revised upward by 22 cents to $12.29 per share over the past 30 days, indicating a whopping 268% increase from fiscal 2023. NVDA stock has rallied 238.2% year to date.
Qorvo is a leading provider of core technologies and radio frequency (RF) solutions for mobile, infrastructure and aerospace/defense applications. The company is benefiting from the rising demand for highly integrated IoT connectivity solutions, Wi-Fi 7 RF front ends and force-sensing touch sensors.
Qorvo’s expertise in domains like RF and power management enables it to deliver high-performance, efficient semiconductor solutions. Strength in automotive connectivity, indoor navigation, smart home and sensor business are upsides.
QRVO stock currently carries a Zacks Rank #2. The consensus mark for fiscal 2024 earnings has increased 10% over the past 60 days to $5.61 per share. The stock has risen 26.4% year to date.
ASML is a world leader in manufacturing advanced technology systems for the semiconductor industry. The company offers an integrated portfolio for manufacturing complex integrated circuits.
ASML is benefiting from its portfolio strength, growing investments, expanding position in the memory market and increasing design wins. Growing opportunities in semiconductor end markets, megatrends in the electronics industry and increasing lithography intensity are bolstering demand for the company’s products and services.
Currently, ASML carries a Zacks Rank #2. The consensus mark for 2024 earnings has been revised upward by 8 cents to $20.33 per share over the past 30 days. Shares of the company have soared 39.8% year to date.
Image: Bigstock
4 Stocks to Consider as the Semiconductor Market Rebounds
After enduring a downturn, the semiconductor industry seems poised for a substantial resurgence as global sales steadily pick up momentum. A period of sluggishness due to various economic challenges and supply-chain disruptions appears to be receding, paving the way for a significant rebound.
Despite year-over-year declines, the recent sequential monthly surge in semiconductor sales indicates a promising trajectory. The Semiconductor Industry Association reported a 3.9% month-over-month increase in global semiconductor sales, reaching $46.6 billion in October.
This sequential monthly growth trend has persisted for eight consecutive months, signifying a robust recovery. The resurgence also follows a strong third quarter of 2023 when sales escalated by 6.3% from the previous quarter to $134.7 billion.
The semiconductor market faced hurdles due to pandemic-induced supply-chain disruptions and the Federal Reserve's stringent monetary policy, dampening demand and triggering a decline in sales. However, with inflation subsiding and demand steadily recovering, the industry has witnessed an upward trajectory since the second quarter of 2023.
Forecasts for 2024 paint an optimistic picture, expecting sustained demand to propel sales growth. The World Semiconductor Trade Statistics projects an impressive 13.1% rebound, anticipating global sales to reach $588.4 billion. Additionally, the technology research firm IDC foresees remarkable 20.2% year-over-year growth, primarily fueled by heightened demand from artificial intelligence (AI) server and endpoint device manufacturers.
Furthermore, long-term prospects remain strong for the industry as semiconductors are the backbone of the current-day technology-driven economy. Digitization across industries, the adoption of cloud computing and the integration of AI and machine learning are expected to fuel demand for semiconductors.
The accelerated deployment of 5G technology — the next-generation wireless revolution — is likely to propel further growth. Apart from this, blockchain, the Internet of Things (IoT), autonomous vehicles, augmented reality/virtual reality and wearables are other growth prospects.
As the industry gears up for this anticipated resurgence, the semiconductor sector appears poised to reclaim its growth trajectory, driven by an upsurge in demand across various technological domains. Here, we have picked four semiconductor stocks — Photronics (PLAB - Free Report) , NVIDIA (NVDA - Free Report) , Qorvo (QRVO - Free Report) and ASML Holdings (ASML - Free Report) — that can boost portfolio return in 2024.
Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high-precision quartz plates that contain microscopic images of electronic circuits. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Photronics has been benefiting from its growth strategy to invest in technology, which drives market megatrends and helps build strategic partnerships with customers by signing long-term purchase agreements. The rising demand for AMOLED displays due to their increasing necessity in the smartphone market is driving the company’s flat panel display business growth.
Its IC business is witnessing strong growth, primarily driven by the solid demand for photomasks globally. High-end demand is led by foundries in Asia and the United States as the semiconductor content in consumer goods continues to increase. Additionally, Photronics’ bottom line is benefiting from strong demand for semiconductors in high-growth margin industries like automotive and electronic appliances and advances in the communication industry, such as the rollout of 5G.
Photronics’ expected earnings growth rate for fiscal 2024 is 27.5%. The Zacks Consensus Estimate for fiscal 2024 earnings of $2.60 per share has improved 15.6% over the past 60 days. Shares of the company have surged 92.7% year to date.
Photronics, Inc. Price and Consensus
Photronics, Inc. price-consensus-chart | Photronics, Inc. Quote
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA is benefiting from growing investments in generative AI. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. Considering surging AI investments across the data center end market, NVDA expects its fourth-quarter fiscal 2024 revenues to reach $20 billion from $6.05 billion in the year-ago quarter.
NVIDIA is dominating the market for AI chips. The company’s GPUs are already being applied in AI models. This is expanding NVDA’s footprint in untapped markets like automotive, healthcare and manufacturing. Collaborations with Mercedes-Benz and Audi are likely to advance NVIDIA’s presence in autonomous vehicles and other automotive electronics space.
The stock currently carries a Zacks Rank #2 (Buy). The consensus mark for fiscal 2024 earnings has been revised upward by 22 cents to $12.29 per share over the past 30 days, indicating a whopping 268% increase from fiscal 2023. NVDA stock has rallied 238.2% year to date.
NVIDIA Corporation Price and Consensus
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
Qorvo is a leading provider of core technologies and radio frequency (RF) solutions for mobile, infrastructure and aerospace/defense applications. The company is benefiting from the rising demand for highly integrated IoT connectivity solutions, Wi-Fi 7 RF front ends and force-sensing touch sensors.
Qorvo’s expertise in domains like RF and power management enables it to deliver high-performance, efficient semiconductor solutions. Strength in automotive connectivity, indoor navigation, smart home and sensor business are upsides.
QRVO stock currently carries a Zacks Rank #2. The consensus mark for fiscal 2024 earnings has increased 10% over the past 60 days to $5.61 per share. The stock has risen 26.4% year to date.
Qorvo, Inc. Price and Consensus
Qorvo, Inc. price-consensus-chart | Qorvo, Inc. Quote
ASML is a world leader in manufacturing advanced technology systems for the semiconductor industry. The company offers an integrated portfolio for manufacturing complex integrated circuits.
ASML is benefiting from its portfolio strength, growing investments, expanding position in the memory market and increasing design wins. Growing opportunities in semiconductor end markets, megatrends in the electronics industry and increasing lithography intensity are bolstering demand for the company’s products and services.
Currently, ASML carries a Zacks Rank #2. The consensus mark for 2024 earnings has been revised upward by 8 cents to $20.33 per share over the past 30 days. Shares of the company have soared 39.8% year to date.
ASML Holding N.V. Price and Consensus
ASML Holding N.V. price-consensus-chart | ASML Holding N.V. Quote