The Top 3 Semiconductor Stocks to Buy in March 2024

  • These companies are at the heart of modern technology, pushing the boundaries to manufacture and supply semiconductors.
  • Broadcom (AVGO): Their next generation silicon chips will drive network connectivity and AI workloads to data centers. 
  • Applied Materials (AMAT): EPS grew 19% YOY to $2.41 per share in Q1 FY24.
  • ASML Holding (ASML): Demand for EUV utilization is accelerating as industry end markets return to a healthy level.
Top semiconductor stocks to buy - The Top 3 Semiconductor Stocks to Buy in March 2024

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The semiconductor industry is flourishing, making investors eager to discover the top semiconductor stocks to buy. Semiconductor stocks provide a unique potential to generate outsize returns, given the importance of advanced semiconductor chips. 

They are needed to power data centers, renewable energy, gaming, smartphones and advanced artificial intelligence applications. These companies are at the heart of modern technology, pushing the boundaries to design, manufacture and supply advanced semiconductor chips. With the global semiconductor industry set to become a trillion-dollar industry by 2030, these 3 companies are poised to outperform over the next decade. 

Now, let’s discuss the top semiconductor stocks to buy in March 2024!

Broadcom (AVGO)

broadcom (AVGO) logo outside office building
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Broadcom (NASDAQ:AVGO) is among the top semiconductor stocks to buy in March 2024. After closing off a record 2023, management expects momentum to continue as network connectivity for AI accelerates. 

Artificial intelligence has been a primary driver of Broadcom’s stock over the last 12 months. The company has embraced the AI race with their custom silicon chips to meet the growing demands of generative AI offerings. Their next generation Trident 5-X12 chip provides double the bandwidth of the previous generation and uses 25% less energy to compute robust AI workloads. Ultimately, this will be key to driving network connectivity to data centers. 

In their latest Q4 and full year 2023 results, Broadcom saw record revenue, earnings and FCF from operations. EPS increased 24% YOY to $32.98 billion, while generating a record FCF of $17.6 billion. Things are looking great for the company and management has forecasted adjusted EBITDA to reach $30 billion in FY24. Now might be a great time to scoop up shares of this pure play AI chip company before it’s too late.

Applied Materials (AMAT)

Applied Materials (AMAT) company sign outside office
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Applied Materials (NASDAQ:AMAT) is an American semiconductor equipment company headquartered in Santa Clara, California. The stock is up more than 20% in the last month, and CEO Gary Dickerson is pointing to growth ahead. 

Applied Materials is critical to the semiconductor equipment industry. Their wafer fabrication equipment has the broadest range of material capabilities for fabricating devices on semiconductor wafers. The system’s leveraged through their technology platforms will be even more valuable with the acceleration of AI and IoT in the cloud. 

Despite a broader slowdown in the semiconductor equipment market in 2023, AMAT was still able to deliver record results. Revenue increased 3% to $26.5 billion, with EPS up 9% to $8.11 per share. Additionally, the company saw record FCF of $7.6 billion. In Q1 FY24, revenue was flat YOY but EPS was up 19% to $2.41 per share. With the company bullish on the market opportunities in AI, AMAT remains one of the top semiconductor stocks to buy now.

ASML Holding (ASML)

Closeup of mobile phone screen with ASML logo on computer keyboard
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ASML Holding (NASDAQ:ASML) should not be overlooked when considering the top semiconductor stocks to buy. The company is currently laying the groundwork in 2024 for accelerated growth over the next several years. 

ASML Holding success spawns from its cutting-edge ultraviolet (EUV) lithography technology, which plans a critical role in the semiconductor manufacturing process. Lithography involves the precise projection of light onto a silicon wafer that forms the basis of electronic circuits. They hold exclusive rights to EUV lithography machines, enabling the production of smaller, more powerful semiconductor chips. 

In the 2023 fiscal year, ASML delivered record revenue and earnings. Revenue increased 30% YOY to $27.6 billion, with EPS up 41% to $19.89 per share. Industry end market inventory levels are returning to a healthy level, and demand for lithography utilization is showing improvements. ASML will continue to be a dominate force in the semiconductor industry, especially as AI drives demand for advanced semiconductor chips. 

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.

Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.


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