The semiconductor industry includes companies that design, manufacture, and sell microchips and related technologies. These components are crucial for electronics, powering everything from smartphones to data centers and artificial intelligence systems. Investing in semiconductor stocks means purchasing shares of these companies listed on public stock exchanges. The performance of this sector can reveal insights about broader technology trends and global economic conditions.
Investing in semiconductor stocks can provide exposure to rapid technological advancements and growth prospects. With rising demand for chips across various industries, there are chances for long-term gains. Many established firms in this sector also offer dividends to shareholders. However, this industry encounters distinct challenges. Chip manufacturing requires substantial capital investment and continuous research and development. The semiconductor field is cyclical; it often sees high demand, followed by periods of oversupply. Additionally, global supply chain issues can hinder production and sales, while competition remains fierce, especially in niche chip markets.
When choosing semiconductor stocks, it’s important to analyze a company’s market position and technological abilities. Evaluate how well they can adapt to swift changes in technology. Focus on aspects such as research expenditure and manufacturing capacity. Be mindful of geopolitical factors affecting the worldwide chip supply chain and consider how government policies influence semiconductor production and trade. With that in mind, let’s examine two semiconductor stocks to monitor in today’s market.
Key Semiconductor Stocks to Monitor
- Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM)
- Advanced Micro Devices Inc. (NASDAQ: AMD)
Taiwan Semiconductor Manufacturing Co. (TSM Stock)
To start, Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) stands as the largest dedicated semiconductor foundry worldwide. The company manufactures chips for various tech giants, utilizing advanced processing technologies. TSMC’s products are used in numerous applications, from smartphones to automotive systems.
Recently, TSMC reported stronger than expected third-quarter 2024 financial results. They announced earnings of $1.94 per share, with revenues reaching $23.50 billion. In contrast, Wall Street had estimated earnings per share of $1.74 and revenues of $22.72 billion for the quarter. Notably, this revenue marks a 36.03% increase compared to the same period last year.
Over the past six months, TSM shares have climbed by 53.84%. However, during the Tuesday morning trading session, Taiwan Semiconductor shares opened lower, down 1.32%, currently trading at $199.29 each.
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Advanced Micro Devices (AMD Stock)
Next, Advanced Micro Devices Inc. (AMD) specializes in designing and developing high-performance computing and graphics processors. The company’s products serve computers, data centers, and gaming systems, competing in both consumer and enterprise sectors.
Earlier this month, Advanced Micro Devices announced the date for its third-quarter 2024 financial results. The company plans to release these results on Tuesday, October 29, 2024, after the close of the U.S. stock market.
Over the last six months, AMD shares have seen an increase of 3.84%. As of Tuesday morning, however, shares opened down by 2.25%, currently trading at $154.34 each.
The views and opinions expressed herein are solely those of the author and do not necessarily represent those of Nasdaq, Inc.
