The advent of artificial intelligence (AI) is rapidly reshaping industries. Investors are presented with a unique opportunity to invest in the top semiconductor stocks to lead the AI revolution.
With AI playing a pivotal role in everything from self-driving cars to medical diagnosis, the demand for powerful AI chips is skyrocketing. Again, this backdrop is certainly not hype, and the market is poised for unprecedented growth in 2024. AI requires advanced chip architectures that can handle massive amounts of data and complex computations. These stocks offer investors the chance to capitalize on the explosive growth potential of the AI market.
Now, let’s discover the top semiconductor stocks to lead the AI revolution in 2024 and beyond!
Taiwan Semiconductor (TSM)
Taiwan Semiconductor (NYSE:TSM), the largest semiconductor foundry in the world, is set to benefit from AI tailwinds in 2024. The company is the backbone of the chip industry and is accelerating the production of advanced AI GPUs. TSMC’s advanced chip-making processes lead to faster and more efficient performance, critical for demanding AI workloads.
TSMC’s dominance in the high-performance computing (HPC) chip market makes it a natural force in the AI market. The company is constantly pushing the boundaries of chip technology, developing the latest 3nm (nanometer) and upcoming 2nm processes set for release in 2025. That continued commitment to innovation ensures TSMC can deliver powerful chips for its customers needed to train and deploy advanced AI models. Wall Street is turning bullish on the company, as they forecast more than 20% revenue growth in FY24. Furthermore, the company is expanding its operational footprint by building two new fabrication plants in Germany and Japan. As AI adoption expands, TSMC remains one of the best semiconductor stocks to lead the AI revolution in 2024.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is a leading semiconductor company and supplier of data center network solutions, including high-speed ethernet switches and network interface cards (NICs). These components are vital for efficiently transferring vast amounts of data, which is essential for running and training large AI models.
The rise of AI necessitates faster and more efficient data connectivity within data center operations. Broadcom’s innovation in data center networking solutions directly addresses these needs. The company’s high-performance networking products ensure smooth data flow, allowing AI models to work at peak efficiencies. Its customer silicon chips will be crucial to meeting the demands of AI workloads. In FY23, Broadcom delivered record revenue of $35.8 billion. The company achieved a record adjusted EBITDA margin of 65% as network connectivity for AI deployments skyrocketed. The future remains bright, and management has forecasted an adjusted EBITDA of $30 billion in FY24.
Micron Technology (MU)
Micron Technology (NASDAQ:MU) stands at the forefront of the AI revolution. The company’s prowess lies in its memory and storage solutions, which are integral components in AI systems. It is crucial for high-performance AI applications.
Micron’s cutting-edge products, such as DRAM and NAND flash memory, are pivotal to powering AI applications across various industries. AI models require massive datasets to learn and perform tasks efficiently. That data must be readily accessible, and that’s where Micron’s memory chips come in. In Q2 FY24, Micron’s return to profitability was driven by product portfolio expansion in AI. Revenue swelled 58% YOY to $5.82 billion. Net income ballooned 67% YoY to $793 million, with EPS up 69% to $0.71 per share over the same period. As AI demand continues to accelerate, Micron is one of the top semiconductor stocks to lead the AI revolution.
On the date of publication, Terel Miles 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.
