Today, let us look at the 5 best semiconductor stocks to buy in March 2024, as per analysts. These stocks have earned a Strong Buy consensus rating on TipRanks, driven by a strong conviction in the sector’s growth potential. The global semiconductor market is expected to witness an upswing in 2024 after facing some challenges in certain end markets last year.
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As per data from research firm Statista, revenue in the semiconductor market is projected to reach $613 billion this year, up from $553 billion in 2023. Thanks to the artificial intelligence (AI) gold rush, the semiconductor chipmaking industry is expected to see burgeoning growth in the years to come.
There are undoubtedly some names in the chip space that capture your mind as soon as you hear the name AI, while there are others who play an important role in making the entire processes of machine learning, large language models (LLMs) training, super-fast computing, etc., possible. All these are dependent on state-of-the-art chips made by semiconductor companies.
#1 Nvidia (NASDAQ:NVDA)
Nvidia designs and makes graphics processing units (GPUs) that are crucial in computing. Its chips have wide applications in gaming, machine learning, video editing, and content creation. Nvidia has become the first chip stock to enter the trillion-dollar club and is currently the undisputable winner in the AI race. Its high-end GPUs are used to accelerate the pace of generative AI apps in all spheres including the cloud, data centers, network edge, and embedded devices.
At its GTC developer conference held yesterday, Nvidia launched its first GB200 GPU, which is part of the Blackwell platform (a new generation of AI graphics processors). The GB200 is boasted to be superior to the H100 chips and designed to accelerate computational efficiency. NVDA stock has gained 241.5% in the past year.
Is NVDA a Good Buy?
Impressed by the conference, Truist Financial analyst William Stein raised the price target on NVDA to $1,177 from $911 while keeping a Buy rating.
Similarly, HSBC analyst Frank Lee lifted the price target to $1,050 from $880 and reaffirmed a Buy rating on NVDA stock. Lee noted that Nvidia is expected to earn incremental revenue from the new B series GPUs and the GB200 product (a combination of GPUs and CPUs).
Overall, with 39 Buys versus two Holds, NVDA stock has a Strong Buy consensus rating on TipRanks. The average Nvidia price target of $913.74 implies 3.3% upside potential from current levels.
#2 Advanced Micro Devices (NASDAQ:AMD)
Similar to Nvidia, AMD is also a fabless semiconductor designer that invents new types of semiconductors and outsources manufacturing to foundries. After rapidly growing in the PC CPU (central processing unit) market in the past few years, Advance Micro Devices is now geared up to take advantage of the AI wave.
AMD is steadily moving from the training phase to the inference phase (the process of running live data through trained AI models to make predictions) and has huge potential with its MI300X accelerator. AMD stock has gained 96.9% in the past year.
Is AMD a Buy or Sell Today?
With 28 Buys and six Hold recommendations, AMD stock scores a Strong Buy consensus rating. The average Advanced Micro Devices price target of $201.26 implies 5.6% upside potential from current levels.
#3 Taiwan Semiconductor Manufacturing Company (NYSE:TSM)
Taiwan Semiconductor is a multinational semiconductor contract manufacturing company, boasting the world’s largest dedicated independent semiconductor foundry. TSM’s chips find applications in several end markets, such as high-performance computing platforms (like personal computers, tablets, servers, and game consoles), the automotive industry, the Internet of Things, and digital consumer electronics.
Chip giants like Nvidia and AMD are highly dependent on TSM since it manufactures the chips that these companies design. The overreliance on TSM comes with a geopolitical risk that includes its location on the world map. China’s unending passion to acquire Taiwan poses an existential risk to TSM’s business in the global chip industry. TSM is also mulling to set up an advanced chip packaging plant in Japan to widen its base and offerings.
Is Taiwan Semi a Good Buy?
TSM stock commands a Strong Buy consensus rating, backed by six unanimous Buys on TipRanks. The average Taiwan Semiconductor Manufacturing price target of $144.33 implies 5.6% upside potential from current levels.
#4 Micron Technology (NASDAQ:MU)
Micron manufactures integrated circuits, computer processors, and storage devices such as random-access memory (RAM), flash memory, and USB flash drives. Micron is slated to release its Q2 FY24 results on March 20, after the market closes. The Street expects Micron to post an adjusted loss of $0.26 per share on revenues of $5.33 billion. MU stock has gained 62.7% in the past year.
Ahead of the results, few analysts have lifted their price targets on MU stock, citing a meaningful ramp-up in the HBM (High Bandwidth Memory) segment. Analysts are also expecting solid beat-and-raise results from the memory chip maker which has a huge potential in the AI market. Importantly, Micron has become a prime supplier of the 24 GB 8H HBM3E, which will be used in Nvidia’s soon to be launched H200 AI accelerator.
Is Micron a Buy or a Sell?
Encouraged by the positive news sentiment surrounding the stock, Micron received a new Street-High price target of $150 (60% upside) recently from Citi analyst Christopher Danely.
Overall, with 25 Buys, one Hold, and one Sell rating, MU stock has a Strong Buy consensus rating on TipRanks. The average Micron Technology price forecast of $104.76 implies 11.7% upside potential from current levels.
#5 ASML Holding NV (NASDAQ:ASML)
ASML is the sole producer of lithography machines that are used to fabricate advanced semiconductors. The Netherlands-based company’s machines use extreme-ultraviolet (EUV) photolithography, a process that uses ultraviolet lasers to etch circuitry into semiconductors.
Notably, ASML holds the monopolistic position in the global EUV photolithography market.
What is the Future of ASML?
Having created a niche for itself, ASML is undoubtedly one of analysts’ most favored stocks. On TipRanks, ASML commands a Strong Buy consensus rating based on six unanimous Buys. The average ASML Holding NV price target of $988.60 implies 5% upside potential from current levels. Meanwhile, ASML stock has gained 45.6% in the past year.
Key Takeaways
The semiconductor industry plays a crucial role in the growth of the AI sector. Investors looking for high growth stocks can consider adding the above 5 best semiconductor stocks to their portfolios after undertaking thorough research.
