Small-cap semiconductor stocks have emerged as a promising investment opportunity, poised for substantial growth in 2024. As global demand for energy storage, automotive, robotics, and artificial intelligence soars, the industry holds tremendous long term potential.
Last year the global semiconductor industry saw a huge boom, driven by the increased demand for AI chips. However, artificial intelligence won’t be the only tailwind to drive long term growth of the industry. McKinsey estimates that the global semiconductor market will become a $1 trillion industry by 2030. This can come much sooner, as demand for AI chips continues to soar.
This leaves increased room for small-cap semiconductor stocks to outperform the market over the next decade.
Below are three small-cap semiconductor stocks on the fast track to double in 2024!
Axcelis Technologies (ACLS)
Axcelis Technologies (NASDAQ:ACLS) is one of the top small-cap semiconductor stocks to buy for 2024. As a leader in the ion-implantation market, the company continues to benefit from the tailwinds of the silicon carbide market.
Axcelis started off 2023 strong surging 100% as the company continued to beat on revenue and EPS estimates. However, in the back half of the year shares continue to fall back down to earlier levels. What is promising about the company is that the fundamentals have not changed and the stock appears to be cheap.
The company continues to benefit from the rapid growth of the automotive industry and rapid deployment of artificial intelligence and LLMs. Axcelis’ Purion platform continues to solve some of the industry’s most critical challenges with advanced chip fabrication optimization. This has resulted in the company’s revenue and EPS in Q3 2023 seeing growth of 28% and 64%, respectively. Axcelis is projected to grow EPS by approximately 30% in FY23. With a PE of 16, now might be a good time to take a closer look.
Navitas Semiconductor (NVTS)
Navitas Semiconductor (NASDAQ:NVTS) is an under the radar semiconductor stock that you’ve probably never heard of. The company is at the forefront of the silicon carbide chip boom, and is leading the way in the advancement of gallium nitride based semiconductors.
Over the last several years, the company has seen an explosion in revenue growth. The rapid adoption of artificial intelligence is fuelling demand, as the energy storage, EV, and electronics industries require higher efficiency and power density. Gallium Nitride (GaN) has superior properties in comparison to its Silicon Carbide (SiC) counterpart. It is now being used more broadly across the electronics industry and now in starting to appear in data centers.
More recently, Navitas secured a large supply deal with Samsung, to power their Galaxy S23. Their GanFast 25W charger is expected to reach 50% charge in 30 minutes. The company has also seen revenue skyrocket 115% YOY to $22 million in Q3 2023. Furthermore, CEO Gene Sheridan said he ‘’expects revenue to far exceed market growth rates in FY24 and for years to come.’’ This makes Navitas one of the best small-cap semiconductor stocks to buy for 2024.
ACM Research (ACMR)
ACM Research (NASDAQ:ACMR) is a Chinese semiconductor equipment manufacturer headquartered in Fremont, California. The company primarily provides wafer packaging and manufacturing, as well as cleaning and preparation of integrated semiconductor chips.
ACM Research share price doubled in 2023, on the back of strong double digit revenue and EPS growth. In Q3 2023, revenue increased 26% YOY to 168.6 million. Net income increased 22%, or $0.39 per share. Spending on mature nodes contributed to market share gains.
Investors should keep in mind that this is a high risk, high reward stock as an overwhelming majority of their business comes from China. The Chips and Science Act can pose systemic risks to U.S. investors, and geopolitical uncertainties can vastly affect the share price. While growth is expected to accelerate in FY24, this stock is for the more risk tolerant investor.
On the date of publication, Terel Miles did not have (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.