3 Semiconductor Stocks to Buy on the Dip: March 2024


  • The US economy is projected to grow strongly in coming years, highlighting robust corporate earnings, record-breaking stock market, and potential productivity boom as driving factors.
  • Advanced Micro Devices Inc. (AMD): Profitability and high Year-over-Year growth, along with business targets benefit AMD’s consumer base.
  • Microchip Tech (MCHP): Presents a promising buying opportunity with its resilient performance, and strategic acquisitions like Microsemi Corporation, positioning it for growth in key sectors.
  • Axcelis Technologies Inc. (ACLS): Specializes in ion implantation machinery for semiconductor manufacturing, trading at a discounted rate and potential for significant growth in AI and electric vehicles.


Semiconductor Stocks to Buy - 3 Semiconductor Stocks to Buy on the Dip: March 2024

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The U.S. economy is expected to continue growing stronger in the coming years than previously anticipated. With the boom of intelligent technologies, the semiconductor stocks to buy have seen a parallel rise in success. The industry was poised at a strong valuation of $573 billion in 2022 but is expected to receive a stronger revenue figure in 2029, reaching $1.4 trillion. During this period, an industry CAGR of 12.2%. AMD holds a strong market presence, compounded by its $288.6 billion market cap

With this economic and semiconductor industry confidence, investing in semiconductor stocks to buy will only serve to benefit. And what’s better? Getting the stocks at a deal. These top three companies are all currently at a discount and will be very profitable if you invest now.

Advanced Micro Devices (AMD)

In this photo illustration, the AMD logo is shown on a smartphone screen.
Source: Pamela Marciano / Shutterstock.com

Advanced Micro Devices (NASDAQ:AMD) is an American semiconductor developer and manufacturer. This widespread business agenda has allowed AMD to gross a $177.87 valuation, with a yearly growth of 84.11%.

With greens in every financial metric, AMD reported a solid quarter in Q4 2023 on all accounts with profitable growth. The company’s revenue marked $6.17 billion, or a YOY growth of 10.16%. Further, the largest gains were in both net income and diluted EPS, with figures of $667 million and $0.42 reported. In these respective categories, YOY percent increases of 3076% and 4100% were marked on the financial sheet. Substantial profits and yearly growth set up the company for success.

Largely, AMD’s specification in who its business targets were slated to improve business overall. With this decision, AMD has emphasized the developers of AI capabilities rather than the users in specific models, creating GPUs such as the MI300X. With this, Advanced Micro Devices is set to capitalize on the artificial intelligence boom while specifying its consumer base to outcompete its competitors.

Microchip (MCHP)

Microchip (MCHP) logo at HQ in Silicon Valley. Microchip Technology Inc. manufactures microcontrollers, mixed-signal, analog and Flash-IP integrated circuits
Source: Michael Vi / Shutterstock.com

Microchip (NASDAQ:MCHP) makes and sells specialized microprocessors, mixed-signal, analog and Flash-IP chips. MCHP’s YTD decline stands at 4.37%, with a 12-month median price aim of $94.00, marking a 9.0% upsurge from its present $86.24 price — this decline makes it perfect to buy now.

In 2024, Microchip outperformed analyst projections, disclosing $8.4 billion in revenue and $4.93 EPS. The firm flaunted a leveraged FCF margin of 26.29%, exceeding the sector’s median of 9.24%. Additionally, Microchip diminished substantial debt and announced a $0.45 per share dividend, showcasing its operational prowess.

The pivotal recent event for the enterprise is the acquisition of Microsemi, fortifying MCHP’s foothold in aerospace, defense, data center and communications sectors, thereby expanding its potential market. Microcontrollers constitute MCHP’s core product, representing around 56.4% of the revenue mix as of FY23. Analog goods, contributed 24.4% of FY23 revenue, and if their power in the market grows, so will revenue.

Axcelis (ACLS)

Image of the Axcelis (ACLS) logo on a web browser amplified through the lens of a magnifying glass
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Axcelis (NASDAQ:ACLS) is a United States-based corporation specializing in crafting, producing and maintaining ion implantation machinery essential in semiconductor manufacturing. Presently, its shares are trading at a discounted rate, marking a decline of 16.36% within the past year.

With a P/E ratio standing at merely 16.18, approximately half of the iShares Semiconductor ETF’s average P/E ratio, analysts concur that the company’s stocks are undervalued. Predictions from eight analysts suggest a median 12-month price of $169.15, indicating a 56.56% increase compared to Axcelis’s current valuation.

The company’s potential growth lies in the AI sector, complementing its advancements in the EV sector. The AI chip boom, combined with the momentum in the automotive sector, it is poised to make a significant impact. The Purion Power Series, including H200 and XE SiC systems, leads the charge in EV adoption, despite the challenges in making EVs as reliable, efficient and cost-effective as traditional internal combustion engine (ICE) vehicles. 

On the date of publication, Michael Que 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.

The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.

Article printed from InvestorPlace Media, https://investorplace.com/2024/03/3-semiconductor-stocks-to-buy-on-the-dip-march-2024/.

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