It’s time to buy back into semiconductor stocks. With surging AI-centric advancements, and a potential quantum computing boom to boot, the industry is seeing a massive revival.
For an idea of just how strong, look at the Vaneck Semiconductor ETF (NASDAQ:SMH). The ETF, which counts Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) as some of its biggest holdings, soared from a low of $85.42 in October 2022 to a recent high of about $150 a share. Even the iShares Semiconductor ETF (NASDAQ:SOXX) ran from about $286 to a recent high of $500. That strength is just part of the reason that it’s time to look for semiconductor stocks to buy.
Better, further technological advancements with AI, quantum computers, autos, and cloud computing will only drive demand higher. So much so, the semiconductor market could be worth $712.4 billion by 2028 from $429.5 billion in 2021, says Vantage Market Research. By 2030, we could be looking at a trillion-dollar industry, says McKinsey & Company.
Let’s delve into some of the top semiconductor stocks to buy.
Advanced Micro Devices (AMD)
Even after a massive rally, Advanced Micro Devices (NASDAQ:AMD) could see higher highs, especially with the AI boom. For one, according to CEO Lisa Su, AI is the company’s biggest long-term opportunity.
“First, second, and third priority are around AI, AI, AI,” said Su, as quoted by Barron’s. “Over the last thirty days, what we’ve seen is a continued acceleration of engagements” for AI in the data center. She added that the market is “skyrocketing”.
Two, AMD just acquired Mipsology, allowing AMD to access AI inference and optimization tools. As noted in an AMD blog post, the acquisition will strengthen its “software capabilities to enable customers around the world to tap into the vast potential of pervasive AI”.
Also, while earnings were overshadowed by Nvidia’s numbers, AMD’s second-quarter results were still encouraging. AMD posted adjusted EPS of 58 cents, a penny above expectations. Revenue came in at $5.36 billion, which was slightly above expectations for $5.3 billion.
Additionally, analysts at Benchmark reiterated a “buy” rating, with a price target of $145.
“We believe AMD is among the best-positioned companies to benefit from the tech sector’s broad macroeconomic adoption of Artificial Intelligence,” said the firm, as also quoted by Barron’s.
Amkor Technology (AMKR)
Or, if you want to invest in a far less expensive semiconductor stock, look at Amkor Technology (NASDAQ:AMKR), one of the world’s largest providers of outsourced semiconductor packaging and test services.
Just recently, the stock collapsed from about $28 to $22.30 on a secondary offering and is now oversold. It’s also over-extended on RSI, MACD, and Williams’ %R, and could eventually refill that bearish gap with patience. The last few times AMKR became this technically oversold, it bounced back shortly after. In fact, you can see the recoveries in mid-August and at the start of May.
Earnings haven’t been too shabby either. While revenues slipped 3.3% year over year (YOY), its Q2 EPS of 26 cents did beat by five cents. Also on Sept. 5, the company declared a dividend of $0.075 to shareholders of record payable Sept. 25.
Invesco Dynamic Semiconductors ETF (PSI)
Or, if you just want to be well-diversified with semiconductor stocks at a low cost, you can always pick up the SOXX ETF or the SMH ETF. However, there’s also the Invesco Dynamic Semiconductors ETF (NYSEARCA:PSI), which last traded at around $44 a share.
Better, the ETF has been hot. Since the year began, the PSI ETF ran from about $33 to a high of $48.19 before backing off to $43.70. From here, given semiconductor momentum, I’d like to see the PSI ETF closer to its 2022 high of about $52 initially.
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.