As artificial intelligence-related semiconductor stocks continue to soar to new heights, investors may find themselves searching for alternative opportunities within the sector. While the fervor surrounding companies like Nvidia (NASDAQ:NVDA) has lifted many semiconductor stocks, it’s essential to approach the market with caution and consider potential forward-looking price adjustments. Despite this, the growing interest in the semiconductor ecosystem may prompt some investors to take calculated risks.
For those willing to explore potential opportunities, here are some semiconductor stocks that enjoy the highest level of endorsement among Wall Street analysts and could be worth adding to your short list:
Taiwan Semiconductor (TSM)
Taiwan Semiconductor (NYSE:TSM) is a multinational semiconductor contract manufacturing and design company, renowned as the world’s second-most valuable semiconductor company and the largest dedicated independent semiconductor foundry. Given its pivotal role in the global computer chip supply chain, the company holds significant geopolitical implications.
TSM stock has experienced a robust performance this year, witnessing a 44% increase in equity value since the beginning of January. Analysts covering the company anticipate revenue for the fiscal year to reach $84.86 billion, marking a substantial 22% increase from the previous year’s figure of $69.4 billion.
Looking ahead, analysts forecast even stronger growth, with revenue projected to reach $101.38 billion by 2025. This represents a significant 19.7% increase from the projected top line for 2024. Additionally, earnings per share are estimated to reach $5.75 in 2024 and $7.03 in 2025.
The consensus among experts is unanimously bullish on TSM shares, rating them as a strong buy. Notably, the highest price target of $185 suggests a potential upside of over 26%. Given these promising indicators, Taiwan Semiconductor emerges as one of the semiconductor stocks worthy of consideration for investors.
ASML (ASML)
ASML (NASDAQ:ASML) stands out as a top choice among semiconductor stocks, particularly for investors seeking highly endorsed enterprises. While not as widely recognized as some household names, ASML holds a crucial position as the leading supplier of photolithography systems, vital for the production of integrated circuits (ICs) and microchips.
ASML stock has already demonstrated strong performance since the beginning of the year, prompting some concerns among investors about its current valuation. Analysts project that sales for the current fiscal year will reach $30.42 billion, representing a marginal increase of less than 1% compared to last year’s figure of $30.18 billion.
Looking ahead, experts anticipate substantial growth for ASML, with sales projected to reach $37.91 billion by 2025. This would mark an impressive 24.6% increase from the projected top line for 2024. Moreover, it’s essential to highlight ASML’s critical role within the broader semiconductor supply chain.
Analysts unanimously rate ASML shares as a strong buy, with a high-side target of $1,050. Given its pivotal position in the semiconductor industry and prospects for future growth, ASML emerges as a compelling option for investors seeking exposure to this sector.
STMicroelectronics (STM)
STMicroelectronics (NYSE:STM), headquartered in Switzerland, is a multinational semiconductor company specializing in the design, manufacturing, and sale of semiconductor products for various electronic applications. The company’s primary focus lies in microcontrollers, which are small computing devices used to control various functions in electronic systems. Additionally, STMicroelectronics is involved in analog integrated circuits (ICs), which process continuous signals such as sound and temperature, converting them into digital data.
In essence, STMicroelectronics plays a significant role in numerous everyday products and systems, including smartphones, automotive systems, home appliances, industrial equipment, and more. Despite its widespread impact, many consumers may not actively recognize the company’s innovations.
Looking ahead, analysts express some uncertainty regarding STMicroelectronics’ future prospects. Sales projections for 2024 suggest a slight decline to $16.17 billion, representing a 6.4% decrease from the previous year’s figure. However, analysts anticipate a rebound in 2025, with sales expected to reach $17.56 billion.
Despite the mixed outlook, covering experts unanimously rate STM as a strong buy, with a price target of $48.40. The high-side estimate suggests a potential share price of $55. Considering its integral role in various industries and the potential for future growth, STMicroelectronics emerges as a semiconductor stock worth considering for long-term investment.