Certain must-buy tech stocks emerge as shining stars in tech investments, promising substantial returns and growth potential. Among these, three technology giants, particularly, are showing strong growth in the semiconductor and AI sectors. With demand for top-class technology only continuing to rise further, these companies are set to cash in on trends in the market.
The first one has groundbreaking advancements in process technology. Meanwhile, the second one has rapid expansion fueled by increasing demand. At the same time, the third one strategically focuses on global market penetration.
Each company offers unique opportunities for investors seeking to ride the wave of the technological revolution. This article delves into the key factors propelling these tech stocks toward doubling their valuations by 2025.
Learn why the trio is a must-buy stock for savvy investors looking to capitalize on future tech.
Intel (INTC)
Intel’s (NASDAQ:INTC) improving performance and leadership in process technology serve as the key factors fabricating the potential for massive valuation. For instance, in Q4 2023, revenue was at the higher end of guidance, exceeding expectations.
The company delivered substantial EPS upside due to a focus on driving operating leverage and effective expense management. The attainment of the $3 billion cost savings commitment for 2023 indicates progress on the focus. The target to attain considerable progress on the IDM 2.0 journey in the next 12 months boosts the potency for sustained growth.
On the product side, Intel’s execution across its process tech roadmap in 2023 brings in major milestones. This includes becoming the world’s first high-volume manufacturer of logic devices using EUV. Hence, incorporating gate-all-around and backside power delivery in a single process node, unexpectedly two years ahead of competitors, builds Intel’s technical moat.
Furthermore, the roadmap includes the launch of Sierra Forest and Granite Rapids, with Sierra Forest having final samples at customers and Granite Rapids ahead of schedule. There is an anticipation of breaking into the Angstrom era with Intel 20A and Intel 18A, demonstrating Intel’s focus on maintaining a continuous node migration path.
Additionally, Intel’s focus on bringing AI everywhere is aligned with the growing demand for AI workloads. The company targets to participate in 100% of the $1 trillion semiconductor TAM by 2030 related to AI and Silicon Logic.
Finally, specific products like Gaudi 3 AI accelerators suggest price-performance leadership. Hence, the launch of Intel Core Ultra represents a significant architectural shift for AI-capable client processors, positioning Intel at the edge in the AI space.
Super Micro (SMCI)
To begin with, Super Micro’s (NASDAQ:SMCI) strong performance is attributed to a surge in demand and improving supply conditions for GPUs and related key system components. The revenue growth of 133% (Q2 fiscal 2024) reflects a market that is receptive to Super Micro’s offerings and actively seeking its products.
Additionally, the accelerating demand phase suggests that Super Micro can secure many more customer wins. This signifies the strength and capacity of its current offerings to adapt to market and macro dynamics.
On the other hand, a significant strategic move by Super Micro to support its rapid growth is the increase in working capital through an equity offering. Through this, the company is raising approximately $600 million, highlighting a tangible infusion of capital into the company’s operations. This enables the company to scale its activities, invest in research and hit on the increasing demand for its products.
Super Micro’s positive outlook suggests strong momentum and growth potential. Notably, the anticipation of Q3 revenue in the range of $3.7 billion to $4.1 billion and the forecast for 2024 ending in June raised to a range of $14.3 billion to $14.7 billion reflect sustained growth.
Furthermore, the anticipation of new platforms, including Nvidia’s (NASDAQ:NVDA) CG1, CG2 Grace Hopper Superchip, H200 and B100 CPUs and GPUs, L40S Inferencing-Optimized GPUs, AMD’s (AMD) MI300X and MI300A and Intel’s Gaudi 2 and Gaudi 3, suggests a focus on staying at the edge of AI technology.
Finally, there is a continuous improvement in the time-to-delivery (TTD) factor, up to 5,000 racks per month, indicating a focus on customer responsiveness. Hence, these factors may continue to boost its topline performance and valuations.
ACM Research (ACMR)
ACM Research (NASDAQ:ACMR) focuses on expanding its customer base in China and internationally. This is a strategic move towards long-term sustainability. Notably, nearly all semiconductor manufacturers in China now use ACM Research tools. This signifies the company’s strong market penetration and recognition within its domestic market.
Additionally, procuring a purchase order from a large US manufacturer for the Ultra C backside cleaning and bevel etch tool indicates ACM Research’s lead in diversifying its global customer base. There is potential for deepening relationships and generating demand for additional tools in the US and Europe. This demonstrates the company’s capability to stabilize toplines based on trust and deliver value to customers.
Furthermore, the investments in facility expansion indicate ACM Research’s focus on providing efficient support to its growing customer base. The expectation to spend about $75 million in capital expenditures for 2023 reflects an inclination toward infrastructure development. Specifically, ACM Research focuses on investing in Lingang production and research centers in China. Also, there is a facility expansion in Korea, and leasing a facility in Oregon for service support boosts sustainable financial growth.
Financially, ACM Research’s outlook for 2023, with revenue expected from $520 million to $540 million, suggests a pragmatic approach. Overall, the solid revenue growth observed in ACM Research’s Q3 2023 reflects the company’s effective market positioning. A 26% increase in revenue, totaling $168.6 million, signifies brawn financial standing. Therefore, the capability to adapt to market trends may continue to support the company’s market value expansion and meet customer demands.
As of this writing, Yiannis Zourmpanos held long positions in INTC, ACMR and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
