Despite recent cyclical headwinds, semiconductor stocks remain strong long-term buys with the potential to mint new millionaires. The rising demand for electronics ensures their increasing importance, making them profitable holdings for investors. Overlooked semiconductor stocks, in particular, present significant potential due to lower valuations and smaller market caps than giants. Although riskier, they offer substantial upside and niche market appeal, providing a strong return potential for long-term investors.
The proliferation of devices reliant on advanced chips drives the semiconductor industry’s growth. This trend underscores the importance of investing in semiconductor stocks. Wall Street analysts have given “strong buy” ratings to several semiconductor stocks, highlighting their significant growth potential. These stocks are poised to become long-term winners for aggressive investors and are worth adding to watch lists.
So, here are three strong buy semiconductor stocks for investors to consider in June 2024, each with millionaire-minting potential.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is a leading semiconductor company specializing in high-performance computing, graphics and visualization technologies. It is also one of the most underappreciated semiconductor stocks.
AMD is focusing on expanding its presence in the AI and data center markets in 2024. The company plans to leverage its MI300 AI accelerator and EPYC CPU product lines to capture a significant share of the growing AI market. AMD’s AI chip sales are projected to reach $2 billion in 2024, driven by strong demand for generative AI applications.
Analyst sentiment for AMD remains positive, with 40.75% earnings growth projections in 2024. Despite moderate expected revenue growth of 16.5%, the company’s focus on AI and high-performance computing positions it for potential future rallies. Thanks to these tailwinds, it also has a predicted 20% upside in the short term.
Taiwan Semiconductor Manufacturing Company (TSM)
Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is the world’s largest dedicated semiconductor foundry. It provides chip manufacturing services to various customers, including major tech companies.
TSMC is projecting a strong performance in 2024, fueled by the ongoing AI boom and its strategic partnerships. SMC anticipates its revenue to grow in the low to mid-20% range for the full year, driven by the increased demand for high-performance computing and AI technologies. The company expects Q1 2024 revenue between $18 billion and $18.8 billion.
Wedbush and Jefferies analysts highlighted TSMC’s bullish outlook, driven by the AI sector and increased business from Apple, particularly with the integration of TSMC’s N3 process in all iPhone models.
Other Wall Street analysts also seem to be bullish on TSMC, as all of its ratings are either buy or strong buy in nature. This is also supported by a bullish backdrop of predicted EPS and revenue rises throughout the next five years.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is a global leader in designing, developing and supplying a broad range of semiconductor and infrastructure software solutions.
The company anticipates robust growth in 2024, with projected revenue reaching approximately $50 billion. This marks a significant increase from the prior year, driven partly by the acquisition of VMware and the expected surge in AI-related revenues, which are projected to exceed $11 billion. The company also plans a capital expenditure of $2 billion to support its growth initiatives.
Broadcom has received analysts’ “strong buy” consensus, with a 12-month price target of $1,733.43. Its strong financial results and strategic acquisitions have positively impacted the company’s stock performance.
AVGO may also be a candidate for a stock split, which could benefit investors indirectly. Like TSMC, AVGO’s earrings and revenue are expected to rise steadily over the next four years.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.