What is the fastest-growing semiconductor company?

While some tiny semiconductor companies may technically have a faster growth rate due to their low basis of comparison, Nvidia is both the largest semiconductor company and the one expected by analysts to have the fastest pace of growth through at least 2025.

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Best Semiconductor Stocks of October 2024

September 30, 2024

9 min Read

Written by John Csiszar

Edited by Melanie Grafil

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Semiconductor stocks have come back in a huge way. After losing more than 35% in 2022, the Philadelphia Semiconductor Index (SOX) posted gangbuster returns of 67.13% in 2023 and 24.95% year to date as of Sept. 29. This pattern of returns shows how volatile — and potentially profitable — the sector can be.

With this volatility in mind, here’s a look at what semiconductor stocks are, how to invest in them and what the best options are for October 2024, based on a combination of performance, future outlook and analyst endorsements. Many may prove to be among the best stocks you can buy in 2024.

What Are the Best Semiconductor Stocks To Buy?

The CHIPS and Science Act, passed in 2022, was intended to stimulate semiconductor research, development and production in the U.S. The country currently produces only about 10% of the world’s semiconductors, but this law aims to increase that number and reduce reliance on chips imported from Asia.

This bill, along with the insatiable global demand for chips, could represent a significant opportunity for semiconductor stocks. If you’re looking for the best semiconductor stocks, here are some to watch:

Micron Technology Inc. (MU)
GlobalFoundries Inc. (GFS)
Broadcom Inc. (AVGO)
Nvidia Corp. (NVDA)
Advanced Micro Devices Inc. (AMD)
Intel Corp. (INTC)
Qualcomm Inc. (QCOM)

1. Micron Technology Inc. (MU)

Micron Technology Inc. has been producing memory and storage solutions for over 40 years. The company recently broke ground on a $15 billion manufacturing fabrication plant in Idaho, positioning it well to take advantage of the benefits provided by the CHIPS Act.

Micron is up about nearly 26% from the beginning of the year, when it was trading at just over $82. According to Yahoo Finance, of the 31 analysts following Micron in September, 28 rated it a “strong buy” or “buy.” The average 12-month price target is $155.91.

2. GlobalFoundries Inc. (GFS)

GlobalFoundries Inc. provides semiconductors for smart mobile devices, personal computers, automotive applications, communications and data infrastructure, and home and industrial IoT, or Internet of Things.

GlobalFoundries has actually fallen in value by 32% year to date, from $58.00 at the beginning of the year to $40.95 on Sept. 29. The analysts are pretty bullish on this stock; out of 17 who followed it in August, four rated it a “strong buy” and five rated it a “buy.” Eight suggested holding. It’s expected to reach a price of $54.99 in 12 months, per average analyst estimates. That’s a projected gain of about 34% over current levels.

3. Broadcom Inc. (AVGO)

Broadcom designs and supplies semiconductor and infrastructure software solutions to data centers, software, wireless, broadband, networking and industrial markets. In May 2022, Broadcom announced it would acquire enterprise software company VMware for $61 billion in cash and stock. U.S. and European regulators eventually signed off on the deal, despite concerns that the deal would fall through, and the transaction finally closed in November 2023.

Broadcom stock closed on Sept. 27 at $172.69, up 54.71% from Jan. 2. The stock has a one-year target estimate of $192.71. Its forward dividend is $2.12, yielding 1.23%. Analysts are behind it, with 10 out of 29 rating it a “strong buy,” 17 rating it a “buy” and just two calling it a “hold.”

4. Nvidia Corp. (NVDA)

It’s hard to even mention semiconductors without referring to market leader Nvidia. The stock has been one of the best-performing in the entire market for multiple years in a row, and it’s showing no signs of slowing. The stock posted returns of 121.93% in 2020, 125.29% in 2021 and 238.87% in 2023, and it’s up another 145% year to date as of Sept. 29. Worth noting, however, is that the stock did drop an astounding 50.31% in 2022 — a reminder to investors that even market-leading semiconductor stocks can be exceedingly volatile.

The chip company that produces essential hardware for everything from cars and gaming consoles to generative AI has the eye of both investors and analysts, even at these lofty levels. Of the 38 analysts covering Nvidia, eight rate it a “strong buy,” 14 rate it a “buy,” 15 recommend holding and one rates it a “sell.” The company has a 12-month price target of $147.04, about 21% above current prices. That average represents a range of $75.40 to $200.

5. Advanced Micro Devices Inc. (AMD)

Advanced Micro Devices develops technology for computing, graphics and visualization for individuals, businesses and scientific research institutions worldwide. AMD provides high-end processors for gaming computers, graphics-intensive applications and technical computing.

AMD is up over 14% this year, starting at $144.28 on Jan. 2 and trading at $164.35 when the market closed on Sept. 27. Analysts have an average 12-month price target of $186.48, roughly 13% above current levels.

6. Intel Corp. (INTC)

For 50 years, Intel has been widely considered the leading U.S. semiconductor manufacturer. The company is now moving from a PC-centric business to a data-centric business in the hope of staying at the top of the heap.

Unlike many other semiconductor companies, Intel has fallen on hard times lately. The stock is down over 52% YTD in 2024 and 53% over the past five years. But this could prove to be a long-term opportunity. Intel was granted up to $8.5 billion in direct funding from the U.S. government via the CHIPS Act of 2022, allowing it to expand its domestic semiconductor production. Analysts see the stock reaching $25.59 over the next 12 months, a potential gain of about 7%.

7. Qualcomm Inc. (QCOM)

Qualcomm Inc. bills itself as “the world’s leading wireless tech innovator,” and it has capitalized on the move toward mobile, the Internet of Things and artificial intelligence.

Qualcomm has continued to surge, rising over 17% YTD and more than 55% over the past year. Twenty-three analysts had a consensus price target slightly below current levels in June. However, the current target is about 25% above current levels, and the consensus rating is still “moderate buy,” according to MarketBeat, perhaps suggesting that those price targets will soon be raised.

What Are Semiconductor Stocks?

Semiconductor companies produce chips that are used in a wide range of electronic devices, from laptops and gaming consoles to smartphones and even cars. These chips are known as “semis” because they have greater conductivity than an insulator but more than a true conductor. They’re used to manage and control the flow of electric circuits, sometimes blocking the flow and sometimes conducting it.

Pros

Access to high-growth industry
Potential for outsized gains

Cons

Stocks are notoriously volatile
Not all industry stocks are going to be winners

Types of Semiconductor Stocks

Not all semiconductor companies are the same. According to the Gordian Knot Center for National Security Innovation at Stanford University, there are seven segments of the semiconductor ecosystem:

Chip intellectual property cores
Electronic design automation tools
Specialized materials
Wafer fab equipment
“Fabless” chip companies
Integrated device manufacturers
Chip foundries

While many semiconductor companies produce goods and/or services in multiple segments, you’ll have to do your research to see just which type of semiconductor stock you are buying.

How To Invest In Semiconductor Stocks

As with any type of stock you buy, the first step to investing in semiconductor stocks is to do your research. Understand exactly what each company makes and how their business operates. Look at their earnings trends, revenue growth, price-earnings multiples and analyst expectations to help you determine the best candidates.

Also, be sure that any stock you invest in matches up with your financial objectives and risk tolerance. If you’re the type who can’t sleep at night worrying about your account dropping 1% in value, for example, semiconductor stocks probably aren’t right for you because they tend to be even more volatile than the overall stock market.

In terms of the actual process to buy semiconductor stocks, all you’ll have to do is use a brokerage firm. If you don’t have an account yet, you’ll need to set one up by providing personal and financial information like your name, address, date of birth, Social Security number, income and investment experience. After you fund your account, you’ll just need to tell your broker to enter the trades you would like, or place them yourself on the brokerage firm’s website.

What Is the Best Semiconductor ETF?

If you can’t decide which semiconductor stock to buy, consider an exchange-traded fund that tracks the returns of the semiconductor sector. Among the largest ones is the iShares Semiconductor ETF (SOXX) with $15.14 billion in net assets. It seeks to match the performance of the NYSE Semiconductor Index, before fees and expenses. Because it’s passively managed, it may provide some protection from volatility compared to buying a single stock.

Is It Good To Invest In Semiconductor Stocks?

The semiconductor industry, like most of the technology sector, was hit hard during the chip shortage of 2022, but it bounced back strongly in 2023 and has continued to surge in 2024. The semiconductor industry is notoriously volatile, and not all investors can stomach the ups and downs in the sector. However, the CHIPS Act should provide a continuing boost to the sector, and the long-term outlook, according to most analysts, is positive, as semiconductors have become integrated into almost everything.

FAQ

Here are the answers to some of the most frequently asked questions regarding semiconductor stocks.

Is it good to invest in semiconductors?
- Investing in semiconductors can be a great way to own a fast-growing segment of the economy that will seemingly play a bigger role in day-to-day life as technology continues to improve. If you understand that the stocks themselves can be quite volatile, and therefore not suitable for risk-averse investors, investing in semiconductors offers the potential to boost your portfolio's long-term returns.
What is the fastest-growing semiconductor company?
- While some tiny semiconductor companies may technically have a faster growth rate due to their low basis of comparison, Nvidia is both the largest semiconductor company and the one expected by analysts to have the fastest pace of growth through at least 2025.

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Daria Uhlig and Karen Doyle contributed to the reporting for this article.

Data was compiled on Sept. 29, 2024, and is subject to change. Information on analyst ratings was sourced from Yahoo Finance and MarketBeat.

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