7 Must-Own Semiconductor Stocks for Explosive Portfolio Growth in 2024!

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Not all semiconductor stocks are alike. While some are struggling, there are also exceptional semiconductor stocks that are excellent additions to any portfolio.

Certain semiconductor stocks have been impacted by challenges in industries such as electric vehicles, smartphones, and solar power. However, other factors are driving the performance of the semiconductor stocks listed here. Technologies like generative artificial intelligence and machine learning are significant contributors to the success of these stocks.

As more companies focus on developing features and platforms that leverage these technologies, semiconductor stocks poised to benefit from this trend are likely to continue performing well.

We use Portfolio Grader to identify some of the top semiconductor stocks to consider. This tool evaluates stocks based on various criteria, including momentum, growth, earnings performance, and analyst sentiment.

When you come across stocks with "A" and "B" ratings, you know you're looking at true superstars in today's market.

Nvidia (NASDAQ:NVDA) undoubtedly deserves the top spot on any list of semiconductor stocks to buy. The company has been a standout performer, with its stock soaring 239% in 2023 due to significant earnings growth.

Nvidia primarily produces high-powered semiconductors used in generative AI applications. This focus has propelled Nvidia's market capitalization to $2.2 trillion, making it the world's third-largest company by market capitalization.

The demand for processors used in training large language models is expected to continue growing, along with the demand for chips for other AI applications. It wouldn't be surprising to see NVDA stock reach $1,000 per share soon.

In 2024, NVDA stock has already risen by 82% and receives an "A" rating in the Portfolio Grader.

While Nvidia had a stellar 2023, its main competitor, Advanced Micro Devices (NASDAQ:AMD), had a somewhat less successful year. Despite a strong gain of 129%, AMD's performance was overshadowed by Nvidia.

However, 2024 is shaping up to be a better year for AMD. The company is launching its MI300 semiconductors, which can compete with Nvidia's AI offerings. AMD expects to generate $3.5 billion in revenue this year from the MI300 alone.

Additionally, AMD holds a 90% market share for AI chips for personal computers. While this segment is relatively small in the AI space, the potential from AI infrastructure chips is not fully reflected in AMD's current stock price.

AMD stock has risen by 21% so far in 2024, making it a relative bargain after a recent pullback. It also receives an "A" rating in the Portfolio Grader.

Broadcom (NASDAQ:AVGO) is another semiconductor manufacturer known for its products used in data centers, networking, software, storage, wireless, and industrial applications.

The company has expanded its reach into the software market through its acquisition of VMware. This acquisition complements Broadcom's existing strengths and allows it to offer customers a hybrid cloud platform.

Broadcom expects its software segment to generate as much as $20 billion in revenue in fiscal 2024, a significant increase from $7.6 billion in 2023.

AVGO stock has risen by 14% so far in 2024 and 98% in the last 12 months. It receives a "B" rating in the Portfolio Grader.

Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is the world's largest chip manufacturer, responsible for approximately 55% of all contract chip manufacturing and 90% of the most advanced chips.

As Nvidia, AMD, Broadcom, and others rely on TSMC to manufacture their chips, it's a natural choice for any list of top semiconductor stocks to buy. The company's recent performance also supports this bullish outlook.

TSMC reported earnings of $19.6 billion for the fourth quarter, with earnings per share of 29 cents. The company projects revenue in the first quarter of this year to be between $18 billion and $18.8 billion, driven by strong demand for high-performance computing chips.

TSM stock has risen by 31% in 2024 and receives a "B" rating in the Portfolio Grader.

Photronics (NASDAQ:PLAB) is a leading manufacturer of semiconductor photomasks, essential components that allow semiconductors to function correctly.

The company's photomask products and services include advanced integrated circuit technology nodes, binary masks, phase-shift masks, and special purpose products. Without quality photomasks, semiconductors would not work.

PLAB stock has risen by 67% in the last year and receives a "B" rating in the Portfolio Grader.

Marvell Technology (NASDAQ:MRVL) is a semiconductor manufacturer that designs and manufactures products for carrier, enterprise, data center, and automotive platforms.

Marvell's chips help transmit data quickly for AI applications to function and make decisions. The company is partnering with TSMC to produce 2nm semiconductors optimized for accelerated infrastructure, critical for developing AI applications.

MRVL stock has risen by 66% in the last year and receives a "B" rating in the Portfolio Grader.

Applied Materials (NASDAQ:AMAT) manufactures equipment and provides services and software needed to manufacture semiconductor chips used in various devices.

Despite challenges in some markets, the company is seeing strong sales for its AI chips, which is supporting its performance. AMAT stock has risen by 61% in the last 12 months and receives a "B" rating in the Portfolio Grader.

On the date of publication, the author of this article had long positions in NVDA. They did not have (either directly or indirectly) any other positions in the securities mentioned in this article.