3 Semiconductor Stocks to Buy and Hold Forever: January 2024

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In today’s digital era, where technological breakthroughs like artificial intelligence (AI), machine learning and quantum computing rely heavily on the innovation of semiconductor technology, forever semiconductor stocks have cemented their relevance. These stocks have grown exponentially in recent years while exhibiting no signs of slowing down, making them a captivating investment opportunity.

Moreover, analysts anticipate the AI market will skyrocket from $118 billion in 2022 to an astounding $300 billion by 2026. With such estimates, 2024 promises to be a record-breaking year for semiconductor stocks.

In this landscape of perpetual innovation, three standout companies have proven to be the leaders in the semiconductor industry. Uniquely positioned to capitalize on the burgeoning semiconductor market, they offer investors enduring long-term value and a compelling opportunity to partake in the exciting journey of technological advancement and financial growth.

Nvidia (NVDA)

Nvidia (NASDAQ:NVDA) has made a significant leap in the semiconductor industry, recording a massive 56.4% revenue bump to $24 billion in 2023. These results showcase its evolution from a leading graphics processing unit (GPU) provider for high-end gaming to a diversified innovator in autonomous vehicle chips and cloud-computing data centers.

Financially, Nvidia has been killing it lately, with its third quarter financials revealing a non-GAAP earnings per share (EPS) of $4.02, exceeding expectations by 63 cents, alongside revenue of $18.12 billion, a 205.6% year-over-year (YOY) increase. These figures demonstrate Nvidia’s strong market position and highlight its consistent growth and adaptability.

Aligning with new export regulations, Nvidia is poised to launch the GeForce RTX 4090 D in response to U.S.-China trade dynamics. This strategic move and the company’s stellar financial performance have garnered a “strong buy” recommendation from TipRanks analysts, assigning a 10% upside potential. Nvidia’s journey is a testament to its innovative edge and responsive strategy in the ever-evolving tech sector and makes it a smart investment for those seeking forever semiconductor stocks.

Advanced Micro Devices (AMD)

Advanced Micro Devices (NASDAQ:AMD) is making waves in the semiconductor industry, showcasing its innovative prowess at this year’s Consumer Electronics Show. The company unveiled new desktop central processing units (CPUs) and the Radeon RX 7600 XT graphics card, tailored for enhanced performance and efficiency. These developments mark AMD’s strategic push into high-performance computing and consumer technology.

Moreover, AMD’s new MI300 chips stand out with exceptional processing power and memory, positioning them as strong contenders against Nvidia’s dominance. The design of these chips optimizes space and power consumption while boosting AI and model training workloads, showcasing its commitment to cutting-edge technology.

AMD reported a significant annual bump in its stock price of 140%, marked by its glowing financial reports. In its third quarter, it reported a non-GAAP EPS of 70 cents, beating estimates by two cents. Moreover, its sales rose to a whopping $5.8 billion, up 4.1% YOY, surpassing forecasts by $110 million. This financial success underlines AMD’s robust market position and its continuous drive for innovation.

Taiwan Semiconductor (TSM)

Taiwan Semiconductor (NYSE:TSM) is a standout player in the semiconductor industry, spearheading over 60% of the global semiconductor production and a staggering 90% in the advanced chip segment. This dominance comfortably overshadows its closest rival, Samsung, especially in the realm of cutting-edge chip technology and manufacturing capacity.

Moreover, the company’s recent financial performance underscores its dominance. The fourth-quarter GAAP earnings per American depository receipt of $1.44 exceeded expectations by five cents, alongside revenue of $19.62 billion, slightly down by 1.5% YOY but still surpassing forecasts by $50 million.

Furthermore, the company is poised for substantial growth, with a projected revenue increase of over 20% this year, primarily fueled by the surging demand for AI-centric high-end chips. Analysts at TipRanks support this bullish outlook, assigning a “strong buy” rating and anticipating a lucrative 18.95% upside potential. This forecast is sparking significant investor interest, further cementing Taiwan Semiconductor’s position as a formidable force in the semiconductor sector.

On the date of publication, Muslim Farooque did not hold (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.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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