Top Stocks To Buy Now? 4 Semiconductor Stocks To Watch

28, 2021

6 min read

This story originally appeared on StockMarket

Why Are Investors Eyeing These Semiconductor Stocks Right Now?

Semiconductor stocks performed extremely well last year in the stock market, and analysts are expecting more great things in the space in 2021. And the reason is quite simple. While it’s no secret that semiconductor chips are in demand right now, not every stock in the industry is trending up. This is largely due to the chip shortage and chip manufacturing companies’ unable to keep up with its demand. The world we live in today revolves around the semiconductor industry. This ranges from our smart devices and home appliances to modes of transportation we utilize daily. So it should not come as a surprise that demand for chips is at an all-time high. 

Having said that, many companies that heavily rely on these chips such as Apple (NASDAQ: AAPL) and Samsung (OTCMKTS: SSNLF) were not negatively affected significantly. Apple still reported soaring revenues and record Mac sales in its previous quarter despite the lack of chips which is hampering the production of iPads and Mac computers. Meanwhile, Samsung’s digital appliances business President, Lee Jae-Seung, expects the pandemic-induced home appliance sales boom to extend till the second half of 2021. Samsung’s home appliance operating profit rose over two-fold year-over-year to $357.71 million. All things considered, do you have this list of top semiconductor stocks to buy in the stock market today?

Semiconductor Stocks To Buy [Or Sell] Today

  1. NVIDIA Corporation (NASDAQ: NVDA)
  2. Taiwan Semiconductor Manufacturing Co (NYSE: TSM)
  3. Intel Corporation (NASDAQ: INTC)
  4. ON Semiconductor Corp (NASDAQ: ON)


First up, we have semiconductor giant Nvidia. The company focuses on personal computer graphics, graphics processing units (GPU), and artificial intelligence (AI). Its GPU product brands are aimed at specialized markets. These include GeForce for gamers, Quadro for designers, and Tesla and DGX for AI data scientists. NVDA stock has almost doubled over the past year and appears to be testing its all-time high soon.

semiconductor stocks (NVDA Stock)
Source: TD Ameritrade TOS

Investors have been waiting for its first-quarter earnings report. And it did not disappoint. Nvidia’s overall revenue hiked by 84% for the quarter, with the gaming segment up by 106% and its data center business up by 79%. Furthermore, its diluted earnings per share increased to a historic $3.03, up by 106%. This is impressive even by its existing high standards.

Some investors may have been expecting a deceleration in demand for processors used in gaming but reported financials have proven the doubters wrong. Nvidia also reiterated that the company is expected to vote on a four-for-one-stock split during its upcoming shareholders’ meeting on June 3. So, would this make NVDA stock a buy for you?

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Taiwan Semiconductor Manufacturing

Next, we have the largest semiconductor manufacturer in the world, Taiwan Semiconductor Manufacturing (TSM). In essence, it engages in the manufacturing and sale of integrated circuits and semiconductors. Also, it offers customer service, account management, and engineering services. Given the increasing demand for semiconductors due to the chip shortage, you would expect that TSM would benefit greatly from it. 

top semiconductor stocks (TSM stock)
Source: TD Ameritrade TOS

TSM stock has flattered to deceive since the start of the year despite its strong fundamentals. That said, the stock has more than doubled in price over the past year. In addition, Japan’s government has recently announced that it wants TSM and Sony Group (NYSE: SONY) to invest $9.2 billion to build the country’s first 20-nanometer chip plant. However, TSM has declined to comment and did not elaborate further.

Financially, the company has reported its third straight quarter of record sales in its first-quarter earnings report back in April. Its revenue came in 25.4% higher year-over-year to 12.9 billion. Thus, with its market-leading position in a high-demand sector, would you consider buying TSM stock?

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Intel is a company that engages in designing and manufacturing products and technologies for cloud, smart, and connected devices. It offers platform products, such as central processing units (CPU) and chipsets, and system-on-chip and multichip packages. On top of that, it also offers non-platform or adjacent products comprising accelerators, boards and systems, connectivity products, and memory and storage products.

best semiconductor stocks (INTC stock)
Source: TD Ameritrade TOS

Earlier this month, the company announced that it will invest $3.5 billion to equip its New Mexico operations for the manufacturing of advanced semiconductor packaging technologies. This includes Foveros, Intel’s breakthrough 3D packaging technology. This is significant as investing in its manufacturing operations is an essential component of its recently announced IDM 2.0 strategy.

Indeed, Intel has not been flourishing as compared to its main rival Advanced Micro Devices (NASDAQ: AMD). If anything, INTC stock has been moving sideways for the past few years. However, Intel remains the largest provider of core processors for “x86” personal computers and servers. And most personal computers run on Microsoft Corporation’s (NASDAQ: MSFT) Windows operating system. With that in mind, would you bet on INTC stock’s future?

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ON Semiconductor 

To sum up the list, we have ON Semiconductor. The company offers a portfolio of sensors, power management, connectivity, custom and system on chip (SoC), analog, logic, timing, and custom devices. Basically, its products aim to help engineers solve their unique design challenges in various applications. The company is also currently among the top 10 global automotive semiconductor suppliers in terms of sales and revenue. 

ON stock
Source: TD Ameritrade TOS

On Wednesday, ON Semiconductor along with Ambarella inc (NASDAQ: AMBA), and Lumentum Holdings Inc (NASDAQ: LITE) have announced two new joint reference designs to fast-track Artificial Intelligence of Things (AIoT) device distribution. This would increase the accuracy of AIoT devices across application verticals, starting with biometric access control and electronic locks. Hence enabling them to recognize people and predict their needs. 

ON Semiconductor also reported its first-quarter financial report earlier this month. It boasted revenue of $1.48 billion, an increase of 16% year-over-year. Out of which, automotive revenue was $515 million, up 5% from the previous quarter. Most impressively, Non-GAAP diluted earnings per share were $0.35. That compares favorably to a measly $0.10 in the same quarter a year ago. It appears that disciplined execution in a high-demand environment across its end markets is the driving force for these strong results. All things considered, would you invest in ON stock?

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