With the artificial intelligence boom showing no signs of cooling, semiconductor stocks to buy now could easily race to higher highs.
For one, according to Precedence Research, the global semiconductor market could be worth about $1.137 trillion by 2033. That’s up from $544.78 billion in 2023. Two, until the AI boom cools – which won’t happen soon – semiconductor demand will only rise.
Three, for an idea of just how hot semiconductor stocks can get, look at Nvidia (NASDAQ:NVDA). Before splitting 10:1, the chip giant exploded to more than $1,200 a share. Now at $131, it won’t stay this low for long. In fact, over the long term, NVDA will easily run well above $1,000 again.
Immediate term, according to analysts at Susquehanna, it could see $160.
Fueling even more upside for semiconductor stocks, Apple (NASDAQ:AAPL) just introduced a range of new AI features, including an upgrade to its voice assistant Siri, integration with Open AI’s Chat GPT, and new writing assistance tools.
That being said, semiconductor stocks to buy now could easily race to higher highs. Here are three to buy.
Taiwan Semiconductor (TSM)
Taiwan Semiconductor (NYSE:TSM) is one of the top beneficiaries of Apple’s AI news.
For one, according to Bank of America analysts, TSM is an “indispensable and reliable partner” to Apple, says CNBC.
“We believe the semi-demand upside from Apple can get bigger with its widening AI service, from a relatively low base,” added the firm. “TSMC is Apple’s supplier for the A- and M-series semiconductors and is well poised to benefit from multi-year growth.”
Two, TSM sales are set to soar. Look at May sales, for example. For the month, sales were up just over 30% year over year to about $7.1 billion thanks to AI product demand.
Three, earnings will only get stronger for TSM. In its most recent quarter, the company’s revenue soared 34.3% year over year to $6.1 billion – the fastest pace of growth since November 2022, says CNBC. “In January, the company said that its AI revenue is growing 50% on an annual basis. Analysts expect TSMC to post a 23.7% rise in total revenue this year, according to LSEG consensus estimates, after a decline in 2023.”
Micron Technology (MU)
The last time I highlighted an opportunity in Micron Technology (NASDAQ:MU), I noted, “Micron is one of the world’s biggest producers of memory (DRAM) and storage (NAND) chips used in artificial intelligence. Memory chips are the very backbone of AI and machine learning.”
That was on February 8, as Micron traded at around $85 a share. Today, Micron is up to $147.83 and could test higher highs. Helping, Bank of America analysts just raised its price target on Micron to $170 from $144, as AI moves into consumer devices. Analysts at UBS also raised its price target to $155 from $125, reiterating a buy rating. Even Citi has Micron listed as a top pick.
Also, ahead of Micron earnings next week, Cantor Fitzgerald says it expects to see beneficial artificial intelligence news in its report. All as the AI boom fuels demand for high-bandwidth memory products. The firm also raised its price target to $180 from $150.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is another one of the hottest semiconductor stocks to buy now. While the stock is struggling at the moment, I’d use the weakness as an opportunity to buy.
Helping, analysts at Citi say AMD could take about 10% of the data center graphics processing units (GPU) market. “We believe AMD is using an annual product cadence to keep pace with Nvidia, and we still expect AMD to get 10% share of the data center GPU market or roughly $15.0 billion,” Citi noted. The firm also reiterated a buy rating with a $176 price target.
Analysts at Edward Jones also initiated coverage of AMD with a buy rating, citing growing demand for data center infrastructure. All of which should boost AMD’s GPUs and central processing units (CPUs).
At the moment, AMD has a strong buy rating, with an average price target of $191.03. The highest price target is $235.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
