These companies are some of the best picks for semiconductor stocks to buy now.
It’s an interesting time for companies in the semiconductor business. The rise of AI has brought growing demand for specialized, high-performance chips with it, and that’s translated into a small-scale gold rush of sorts for semiconductor chips.
Semiconductor chips are electronic components that enable computing functions by controlling the flow of electrical signals. These chips are integral to the development of AI because they process large amounts of data fast and efficiently and power tasks like machine learning algorithms. Specialized chips can help multiply the speed for AI computations, improve performance and more.
If you’re looking to capitalize on the inevitable rise of AI, you should consider adding semiconductor stocks to your portfolio. Here, we highlight three top semiconductor companies that are smart choices and promise lucrative returns.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) shares are up nearly 60% this year. That strong performance is on the back of the chip maker’s strong performance for its last quarter. At the time, it registered revenue of $12,487 million — a jump of 43% from the same period last year.
Broadcom is one of several semiconductor companies that found themselves well-positioned to meet the AI moment. The company manufactures semiconductor chips in demand from companies experimenting with the technology. In the second quarter of the fiscal year, Broadcom made $3.1 billion from its line of AI products alone.
And its shares are poised to soar even higher following its scheduled 10-for-1 stock split set for July 15. That, and the fact that Bank of America (NYSE:BAC) thinks Broadcom could join the rarefied trillion dollar companies’ club makes Broadcom one of the best picks for semiconductor stocks to buy now.
Analog Devices (ADI)
Analog Devices (NASDAQ:ADI) is another excellent choice if you’re looking for semiconductor stocks to buy now. Shares have been on the uptick this year since the company released its last earnings report in May.
The company surpassed profit and sales projections and gave an upbeat forecast for the third quarter. CEO Vincent Roche said, “…inventory rationalization across our broad customer base is stabilizing, clearing a path for us to return to sequential growth in the third quarter.” He added the firm expects a “cyclical recovery” in the near future.
The company, whose guidance for the second quarter also exceeded expectations, also noted that new orders for its range of products were increasing.
Analog provides analog, mixed-signal devices, power management solutions, radio frequency offerings, edge processors and sensors with clients in the aerospace, automotive, sustainable energy, communications, digital healthcare, consumer tech and more verticals.
Lattice Semiconductor (LSCC)
Lattice Semiconductor (NASDAQ:LSCC) stock price is down 11% this year after the company reported revenues of $140.8 million — a 23.6% drop from the previous year and in line with analysts’ forecasts. The quarter was weak for the company, which also issued disappointing revenue projections for the upcoming quarter and a drop in its operating margin.
Despite the gloomy results and outlook, the firm expects to bounce back. CEO Jim Anderson blamed the performance on larger industry headwinds but sought to reassure investors the company is “well-positioned for the long-term” after it executes “the largest product portfolio expansion” in the firm’s history.
And Wall Street believes Lattice is poised for a comeback. Benchmark, Stifel (NYSE:SF) and KeyBanc Capital Markets are just some of the investment firms bullish on its stock. If you’re looking for strong semiconductor stocks to buy now, Lattice is definitely one of the most promising prospects.
On the date of publication, Hope Mutie did not have (either directly or indirectly) any positions in the stocks mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com’s Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.