A Cantor Fitzgerald initiating coverage report on the semiconductors and semiconductor equipment industry highlighted their top picks for 2024. On average, Cantor sees 14% upside in 2024 for the 18 stocks it included under its coverage.
2024 Top Stock Picks
Their top stock picks, as highlighted in the report, were NVIDIA Corp NVDA, Western Digital Corp WDC, ASML Holding NV ASML, NXP Semiconductors NV NXPI and GlobalFoundries Inc GFS for 2024. Per the report, these stocks are expected to deliver upside ranging from 21% to 36% in 2024.
| Stock | Upside % 2024 |
| NVIDIA Corp NVDA | 36% |
| Western Digital Corp WDC | 31% |
| NXP Semiconductors NV NXPI | 23% |
| GlobalFoundries Inc GFS | 23% |
| ASML Holding NV ASML | 21% |
| Micron Technology Inc MU | 18% |
| Advanced Micro Devices Inc AMD | 17% |
| Marvell Technology Inc MRVL | 17% |
Other semiconductor companies with at least 15% projected upside include Micron Technology Inc MU, Advanced Micro Devices Inc AMD and Marvell Technology Inc MRVL.
While most semiconductor stocks appear to have good times ahead for them, three names fell in the Neutral rating category – Qualcomm Inc QCOM, Teradyne Inc TER and Intel Corp INTC. Cantor expects these to be relative underperformers.
The Cyclical Recovery Is Different This Time
The semiconductor industry is experiencing a cyclical recovery, with the PHLX Semiconductor Sector Index SOX, hitting its bottom in October 2022 and rising 95% since then. The trajectory was seen replicated by the iShares Semiconductor ETF SOXX.
Nevertheless, the industry’s core fundamentals hit their lowest point in the second quarter of 2023, signaling the start of a major upward shift.
Notably, this recovery differs from previous cycles, with unique factors such as varying lead times, inventory builds, and supply/demand dynamics contributing to increased volatility across different end markets.
The current cycle sees AI, PC/Smartphones, Data Center/Networking as potential gainers from here, while Industrials and Auto may just see a downcycle phase, the analysts note.
Strong Year For Semiconductor Stocks In 2024
Cantor analyst C.J. Muse predicts an 18% growth in semiconductor revenues for 2024, noting that certain risks could drive this figure above 20%.
Key areas of interest could include AI (both Compute & Networking) and Memory (both DRAM and NAND), with selectivity in System-on-Chip (SPE) companies acting as “arms dealers” to these trends. The market anticipates another strong year for semiconductor stocks in 2024, with investors eyeing exit strategies in late 2024 or early 2025.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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