Wall Street Favorites: 3 Semiconductor Stocks With Strong Buy Ratings for May 2024


  • Kickstart your portfolio with these semiconductor stocks to buy.
  • STMicroelectronics (STM): ST provides the integrated circuits that undergird myriad applications.
  • Marvell Technology (MRVL): Marvell Technology may rise on its System-on-a-Chip specialty.
  • Semtech (SMTC): Semtech is on a hot streak yet analysts believe it can get hotter.
Semiconductor Stocks to Buy - Wall Street Favorites: 3 Semiconductor Stocks With Strong Buy Ratings for May 2024

Source: Shutterstock

Semiconductor stocks to buy: it’s the answer to the question, what do artificial intelligence, the 5G rollout, the Internet of Things (IoT) and a host of other innovations have in common?

Let’s get down to it. Semiconductors represent the building blocks of technology. While the focus in the market tends to be on the front-facing innovation such as generative AI, none of the innovations that we gawk over would be possible without semiconductors.

And yes, certain semiconductors get the lion’s share of the attention, like Nvidia (NASDAQ:NVDA). However, this space is so much more than just NVDA. With that in mind, below are intriguing semiconductor stocks to buy.

STMicroelectronics (STM)

STMicroelectronics building
Source: Michael Vi / Shutterstock.com

Based in Geneva, Switzerland, STMicroelectronics (NYSE:STM) – better known as simply ST – isn’t exactly a household name in most parts of the world. Chances are, however, you’ve been positively impacted by the company’s products. ST along with its subsidiaries designs, develops, manufactures and distributes semiconductor products. Specifically, it specializes in integrated circuits (ICs) that serve as the backdrop for myriad systems and applications.

In other words, if you’ve used a modern appliance or driven a contemporary vehicle, there’s a good chance that ST was involved in some of the tech interfaces. Thanks to the broad relevancies, analysts rate shares a consensus strong buy with an average price target of $48. That implies 12% upside, with the most optimistic target rising to $55 or more than 28% up from the time of writing.

To be fair, for fiscal 2024, analysts anticipate a slowdown. Earnings per share could come down to $2.15 while the top line could slip to $14.36 billion. Last year, the results stood at EPS of $4.46 on sales of $17.29 billion. However, fiscal 2025 could start a recovery, with EPS moving to $2.97 on revenue of $16.12 billion.

For patient investors, STM could be one of the semiconductor stocks to buy.

Marvell Technology (MRVL)

image of the marvell (MRVL) technologies office campus
Source: Michael Vi / Shutterstock.com

Based in Wilmington, Delaware, Marvell Technology (NASDAQ:MRVL) might not be a standout name among semiconductor stocks to buy. While it’s not getting the recognition of an Nvidia, Marvell offers significant pertinence to data infrastructure solutions. Its offerings span from the datacenter core to network edge computing. Specifically, the company specializes in System-on-a-Chip (SoC) architectures, integrating analog, mixed signal and digital signal processing functionality.

According to Mordor Intelligence, the SoC market will reach a valuation of $1272.65 billion in 2024. By 2029, this segment could rise to $253.8 billion. If so, it would represent a compound annual growth rate (CAGR) of just over 8%. Financially, Marvell attracts prudent investors for its consistent earnings performances. In the prior fiscal year (2024), the company’s average quarterly surprise came out to 3.13%.

For the current year (fiscal 2025), analysts see a down year, with EPS to $1.46 on sales of $5.4 billion. Last year, the company posted EPS of $1.51 with a top line of $5.51 billion. However, in fiscal 2026, EPS could fly to $2.45 on revenue of $7.05 billion. Therefore, MRVL could rank among the semiconductor stocks to buy for patient investors.

Semtech (SMTC)

SMTC stock: The Semtech logo on a sign outside its building
Source: Shutterstock

Headquartered in Camarillo, California, Semtech (NASDAQ:SMTC) designs, develops, manufactures and markets analog and mixed-signal semiconductors and advanced algorithms. According to its corporate profile, Semtech provides signal integrity products. These include a portfolio of optical data communications and video transport products used in various infrastructure and industrial applications. Further, the company offers a portfolio of ICs for data centers, enterprise networks and passive optical networks.

To be sure, SMTC stock has been on the move. Since the start of the year, the security rocketed higher to nearly 85%. Over the past 52 weeks, the market value has more than doubled. As a result, the average price target of $39.61 among analysts represents a 1% downside. However, keep in mind that Semtech commands a unanimous strong buy rating. Further, the high-side target hits $50, implying 25% upside potential.

For the current fiscal year (2025), experts only project modest top-line growth to $874.98 million. Last year, the company generated sales of $868.76 million. However, in the following year, Semtech might post sales of $1.03 billion, up 18.1% from projected fiscal ’24 sales.

This could be one of the semiconductor stocks to buy, even with the already-outstanding performance.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/wall-street-favorites-3-semiconductor-stocks-with-strong-buy-ratings-for-may-2024/.

©2024 InvestorPlace Media, LLC