You probably made a pretty penny if you invested in semiconductor stocks in 2023. And if you want to keep the profits rolling in during 2024, find the best semiconductor stocks to buy.
Semiconductor stocks can be smart for those who are looking for solid growth stocks. As technology evolves, semiconductors continue to play an important role in modern society.
For instance, electric vehicles largely depend on semiconductors. A single vehicle needs several hundred semiconductors to power its electronics, battery management systems, and driver-assistance systems. Semiconductors are also critical for the evolution of smart cities, intelligent transportation systems, generative AI and machine learning.
If you’re looking for the best semiconductor stocks to buy in January, the Portfolio Grader can point the way. It’s a free tool that evaluates stocks based on various measurements, including growth, earnings performance, momentum and sentiment.
These are the best choices today for investors looking to make a splash with semiconductor stocks.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) has long been one of the top semiconductor stocks. But it lagged the competition (which was the next name on this list) in 2023 because it couldn’t immediately compete in the lucrative generative AI field.
That’s changing in 2024. AMD is getting its Instinct MI300 accelerators on the market this year and they can run generative AI applications. There are projections that the company could ship as many as 400,000 units in 2024.
The competition’s chips sell for tens of thousands of dollars each, so it’s very possible that AMD’s initial projection of $2 billion in revenue on the chips will be conservative.
AMD also has high hopes for its Ryzen 8040 Series processors for laptops, which would give it another major revenue stream.
AMD stock is up more than 120% in the last year, and it’s already bounced back from a weak start in 2024. It gets an “A” rating in the Portfolio Grader.
Nvidia (NASDAQ:NVDA) is the competition AMD is trying to catch in the generative AI space. Nvidia has the lion’s share of the market for chips that can operate generative AI applications, which led to the company’s amazing gains in 2023.
NVDA stock jumped 269% in 2023 as generative AI emerged. The company’s semiconductors were in keen demand, and the company’s revenue jumped in the third quarter to $18.12 billion, up 206% from a year ago.
Nvidia is now the sixth-largest publicly traded company in the world. So is it reasonable to expect gains to continue this year?
I think so. Maybe not at the same rate as 2023’s gains, but Nvidia will still have a strong year. Nvidia has figured out how to work around the import bans affecting the China market. With an 85% market share in the accelerator chip market, AMD has a long way to go to make a serious dent.
Nvidia also has attractive fundamentals, trading at only 24 times FY2025 earnings. It gets an “A” rating in the Portfolio Grader.
Broadcom (NASDAQ:AVGO) is a California company that makes semiconductors and provides infrastructure software solutions. Its products are used to support data centers, networking, software, broadband, storage, wireless and industrial applications.
Broadcom saw its business grow by 8% last year as the demand for accelerators and network connectivity for AI products drove interest in its product line. Broadcom is also expecting big returns from its now-closed purchase of VMWare, which it believes will increase revenue from $35.8 billion in 2023 to $50 billion in 2024.
Revenue in the third quarter was solid at $8.87 billion, up 5% from a year ago. Broadcom also offers a nice dividend of nearly 2%. Up 80% in the last year, it gets an “A” rating in the Portfolio Grader.
Ebang International Holdings (EBON)
The blockchain technology company designs application-specific integrated circuit chips that are used by Bitcoin miners.
Besides its chip design business, Ebang also offers a cryptocurrency exchange platform called Ebonex, and does some mining as well.
The company only reports financial results every six months, which can leave investors somewhat in the dark compared to the quarterly reporting practices of U.S.-based companies.
Revenue for the first six months of 2023 dropped to $4.09 million, down 83% from the previous year. Profits also fell, from $13.6 million in the first half of 2022 to $990,000 in the first six months of 2023.
However, the cryptocurrency market has changed markedly over the last few months. Bitcoin rose over 50% in the last six months and now trades at more than $45,000. That’s going to help Ebang’s bottom line tremendously.
EBON stock is up 47% in the last 12 months and gets an “A” rating in the Portfolio Grader.
Applied Optoelectronics (AAOI)
Applied Optoelectronics (NASDAQ:AAOI) provides optical components for the telecom, fiber to the home, sensing, data center, wireless and cable access industries.
The company uses semiconductors and laser components to provide equipment that’s needed to keep customers connected to the internet through broadband fiber access networks.
The company had an amazing 2023, rising over 800% on the heels of a strong second-quarter earnings report and a supply agreement with Microsoft (NASDAQ:MSFT). It didn’t announce the agreement in a news release but instead disclosed it in SEC filings. As Microsoft is at the forefront of cloud computing and AI, the company’s relationship with Microsoft is important.
Applied Optoelectronics also saw greater demand for its 100G and 400G data center products in the second half of 2023 and shipped its first samples of 800G data center products.
The Texas-based company reported third-quarter results that included $56.7 million in revenue, up from $41.6 million a year ago. The company’s loss of $1.7 million (5 cents per share) improved from a year ago when it posted a loss of $7.1 million and 26 cents per share.
AAOI stock gets an “A” rating in the Portfolio Grader.
Universal Display Corp. (OLED)
Universal Display Corp. (NASDAQ:OLED) manufactures and develops organic light-emitting diode technology. The technology is used in televisions and digital displays, using millions of pixels that emit their own light instead of using a separate back-light.
OLED technology is considered to be superior to traditional light-emitting diode technology because it provides better picture quality.
That’s extremely important to the growing smartphone market, as people increasingly turn to handheld devices to stay connected rather than a desktop, laptop or tablet.
The New Jersey-based company announced a long-term agreement with BOE Technology Group in China, allowing Universal Display to supply its proprietary phosphorescent OLED materials and technology for BOE’s OLED displays.
While revenue from material sales in the third quarter increased from $84.2 million to $92.5 million, overall revenue for the company dropped to $141.1 million, compared to $160.5 million a year ago. The company blamed the shortfall on a steep drop in royalty and licensing fees.
However, Universal is expecting strong revenues in 2024 because of an expected OLED IT adoption cycle and increased adaption of OLED technology in infotainment displays in electric vehicles.
OLED stock is up 52% in the last year and gets an “A” rating in the Portfolio Grader.
QuickLogic Corp. (QUIK)
QuickLogic Corp. (NASDAQ:QUIK) is a California manufacturer of low-power, multi-core semiconductor platforms and hardware. The company develops products for industrial, aerospace, defense, edge and endpoint AI, consumer, and computing applications.
It also has a wholly owned subsidiary, SensiML Corp., which makes AI and machine learning software.
Its low-power products are ideally suited to operate in mobile devices, including those used by medical professionals, industrial workers and consumers.
The company has a contract with the Department of Defense to develop technology for future Pentagon and space system projects. It was an effort that QuickLogic says contributed to soaring revenue in the third quarter. Revenues were up 93% from a year ago to $6.7 million. The company also posted record net income of $1.8 million.
QUIK stock is up 153% in the last year and gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had long positions in NVDA and MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had long positions in NVDA and BTC-USD. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.