Photronics reported revenues of $211 million, down 2.8% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations and a significant miss of analysts’ EPS estimates. Nvidia has the highest growth rate due to its leadership in the development of GPUs for AI, as well as its successful expansion in the data center segment.

Best semiconductor ETFs to buy right now

Its top and bottom-line results have consistently grown by double-digit margins over the past several years and are poised for even bigger gains. With the AI landscape in its infancy, analysts fully believe in Nvidia’s pricing power on AI chips, propelling its revenue and valuations skyward. It’s been an incredible wealth compounder over the years, and with AI in the mix, it could comfortably surpass its highest price of $333.3 and then some. Companies with a high ROIC are less exposed to risks and better adapted to economic downturns because they use their resources more efficiently. Investors rely on ROIC to compare the performance of different companies and to identify the most promising investment opportunities.

Above-average profit margins

The stock attracts investors with the company’s AI developments and integration of new technologies into server platforms. Spending on artificial intelligence (AI) infrastructure continues to rise, setting the stage for companies in the AI chip space to outperform over the coming years. The company’s position is particularly strong, given the growing demand for semiconductor technology. In the medium term, the stock has upside potential due to innovation and technological advancements. However, the stock’s price volatility and competitive pressures could impact its stability.

Reflecting On Semiconductor Manufacturing Stocks’ Q1 Earnings: Marvell Technology (NASDAQ:MRVL)

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However, LRCX is still significant in size with a more than $100 billion market cap and more than $15 billion in annual revenue projected in 2024. Furthermore that sales total is expected to grow roughly 18% in the second quarter thanks to the sector-wide recovery and a good chance of continued investment in its gear as a result of that rebound. Our editors are committed to bringing you independent ratings and information. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the investing methodology for the ratings below.

• In addition to its massive scale, AVGO also offers a much more generous dividend than NVDA, with an above-average yield that even tops the 1.4% offered by the typical S&P 500corporation right now.
• That helps level the playing field with Nvidia, whose CUDA advantage is less critical here.
• Semiconductors are crucial in IoT devices since they provide the processing power and connectivity needed for these devices to function.

Hottest Charts to Watch in Q2 Earnings Season

Moreover, it boasts an order backlog of $16.6 billion and is undergoing a transformation that could take its gross margins past the 50% mark. By 2025, the firm is targeting 20-25% free-cash-flow (FCF) revenue conversion, equating to approximately $2 billion in FCF. Moreover, its shareholders can expect to reap the benefits, with an anticipated 50% of the cash flow returned to them. It Gaudi AI chip has demonstrated strong potential in handling large language models.

It has amassed assets over $26.24 billion, making it one of the largest ETFs attempting to match the performance of the Technology – Semiconductors segment of the equity market. SMH seeks to match the performance of the MVIS US Listed Semiconductor 25 Index before fees and expenses. Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency.

Our list of the best semiconductor stocks is constructed using strict criteria that aim to identify companies with stable operations and strong analyst sentiment. However, the company has carved out a solid niche with its GPUs in the AI inference market, where performance demands are lower and cost becomes a bigger factor. That helps level the playing field with Nvidia, whose CUDA advantage is less critical here.

ASML is the sole provider of extreme ultraviolet (EUV) lithography machines, what is amarkets the sophisticated tools used to manufacture the world’s most advanced chips. But it’s the Alphawave acquisition that may prove the linchpin of Qualcomm’s long-term data-center ambitions. At the Augmented World Expo, Qualcomm showed off the Snapdragon AR1+ platform, which powers the new RayNeo X3 Pro smart glasses. The glasses can run generative AI on-device, without needing a smartphone tether, an early but notable step into the growing spatial computing market.

ARM Holdings stock is poised to be an attractive investment, especially for investors focused on long-term growth. With a market capitalization of $153 billion (as of January 2025) and a 99% growth posted in 2024, ARM is a rapidly expanding asset with promising future prospects. From compact personal computers to giant data servers, companies from the semiconductor industry have had a major impact on individual consumers and multinational corporations. This presents a unique opportunity for you to choose a technology company that aligns with your stock portfolio. The best stock depends on your investment objectives and risk tolerance, but Nvidia was one of the best-performing and largest semiconductor stocks in mid-2024. A company’s balance sheet that has more cash than debt and low debt relative to operating profit, is a key element to watch.

• A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks.
• Finally, Mizuho raised their price objective on shares of ON Semiconductor from $60.00 to $72.00 and gave the company an “outperform” rating in a research note on Thursday, June 26th.
• The combination gives Qualcomm a clearer shot at the AI inferencing market, where it’s now poised to take on more established players in the data-center space.
• Smartphone chip shipments rose about 12% year over year, while the IoT and automotive businesses jumped 27% and 59%, respectively.

Because of this, SMH is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well. Marvell Technology achieved the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 12.7% since reporting and currently trades at $71.89. While the above companies are involved in the design of chips, Taiwan Semiconductor Manufacturing is the one generally making them. As such, it doesn’t matter who is the biggest AI chip winner or who takes market share — Taiwan Semiconductor wins as long as AI infrastructure and chip spending continue to grow.

In fact, Gaudi2 surpassed Nvidia’s competing chip in training AI systems, although Nvidia’s latest release has since eclipsed Gaudi2. Undeterred, Intel is diligently working on Gaudi3, keeping pace with Nvidia. What sets the firm apart is its unparalleled capacity to tackle the complexities of semiconductor manufacturing, which continue to grow invaluable over time.

But QCOM has been a leader in the space since its formation back in 1985, and it has a reliable enough revenue stream to fuel a decent dividend.