3 No-Brainer Semiconductor Stocks Worth All the Fuss

Stocks to buy

Investors are on the prowl to find the best no-brainer semiconductor stocks to buy for 2024. The semiconductor industry has been on a tear in 2023, largely driven by the hype of generative AI and LLMs. Nvidia (NASDAQ:NVDA) led the pack and investors are now wondering who is next to follow in its footsteps.

The semiconductor industry is one of the most powerful and important industries in the world. It is needed to power vehicles, smartphones, laptops, tablets, refrigerators and more. While growth in 2023 may have been driven by artificial intelligence, that is not the only tailwind that will contribute to growth over the next decade. 

McKinsey estimates that the global semiconductor industry will become a trillion dollar industry by 2030. Demand for electric vehicles, data storage and telecommunications will be the largest contributors to the growth of the industry. With the Federal Reserve set to cut interest rates in 2024, these three semiconductor stocks should not be ignored.

Now, let’s discuss the three no-brainer semiconductor stocks worth all the fuss!

Axcelis Technologies (ACLS)

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Axcelis Technologies (NASDAQ:ACLS) is an under the radar semiconductor that has been on a tear in 2023. It is one of the leading providers of ion implantation equipment for the semiconductor industry. 

Axcelis has an increase in demand for its technology due to the explosive growth of the electric vehicle industry and artificial intelligence. The company’s Purion portfolio has seen strong growth in fiscal 2023. It expects to achieve annual revenue of more than $1.1 billion, with silicon carbide systems accounting for 35% of systems revenue. 

The ion implantation market is becoming more mature, and with the explosion of AI there are more use cases than ever. Axcelis is currently well capitalized and its diversified product portfolio allows the company to serve many different markets. With a P/E of only 19, now might be a great time to scoop up shares before the new year.


Source: Ralf Liebhold / Shutterstock

ASML (NASDAQ:ASML) is having a strong 2023 fiscal year and next year might be even better. Major tailwinds in artificial intelligence and EUV lithography could spell massive returns over the next decade. 

With semiconductor companies on a tear this year, investors are looking for the next Nvidia stock. Certainly, ASML is a strong candidate given how valuable the company’s technology is. ASML primarily develops advanced semiconductors chips for the electronics industry leveraging its proprietary lithography machines. 

Over the last 5 years, the company has seen an explosion in its share price driven by strong execution and profitability. In Q3 2023, ASML grew revenue by 15% YOY to $6.69 billion. Gross margins remained robust at 51.9%, above guided estimates. Furthermore, the company recently announced a joint-venture with Samsung to invest up to $760 million to build an advanced chip plant in South Korea. This makes ASML one of the best no-brainer semiconductor stocks to buy for 2024.

Applied Materials (AMAT)

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Applied Materials (NASDAQ:AMAT) is a leading American semiconductor company headquartered in Santa Clara, California. The stock is up 70% YTD, and the stock might be setting up for new highs in 2024. 

Applied Materials semiconductor equipment is essential for the fabrication of state-of-the-art semiconductor chips. Its integrated chips power the energy storage, automotive and electronics industry. In the 2023 fiscal year, the company saw record revenue, EPS and cash flow, outgrowing the wafer fabrication equipment market. 

For FY 2023, Applied Materials revenue grew 3% YOY to $26.52 billion. While top line growth was small, the company grew EPS 9% YOY to a record $8.11 per share. Gross margin remained robust at 47%, with the company generating $8.70 billion in cash flow from operations. If you’re looking for no-brainer semiconductor stocks to buy, Applied Materials should be one of the first places to look.  

On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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