The 3 Best Semiconductor Stocks to Buy Now: September 2023

Nowadays, as technology continues to advance, so does the need for semiconductors.

Fortunately, the daring companies within this sector are responsible for creating the most efficient, powerful, and capable semiconductors. Let’s look at the three best semiconductor stocks to buy this month, from companies that will grow your portfolio.

Qualcomm (QCOM)

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Qualcomm Incorporated (NASDAQ:QCOM), is a technological powerhouse with a knack for pioneering innovations, especially in wireless communication and connectivity.

In their most recent financial report, they flaunted revenues of $8.5 billion, an impressive feat. In addition, their earnings per share (EPS) exceeded expectations, with $1.60 on a GAAP standard and $1.87 on a non-GAAP standard.

Specifically, one standout gem for Qualcomm CDMA Technologies (QCT) is their automotive technology division. This unit has seen a whopping 11 consecutive quarters of double-digit year-over-year (YOY) revenue growth.

In a groundbreaking move, Qualcomm is teaming with Jaguar Land Rover (JLR) to introduce 5G capabilities. This partnership aligns seamlessly with JLR’s vision of elevating luxury entertainment systems. Qualcomm’s Snapdragon Digital Chassis technology suite offers lightning-fast speeds and ultra-low latency for an consistently connected, immersive driving experience.

Last month, Qualcomm made headlines by achieving a jaw-dropping 7.5 Gbps download speed with their Snapdragon X75, a world record in 5G speed. This showcases Qualcomm’s unwavering commitment to pushing the boundaries of 5G performance, cementing their status as a leader in next-gen wireless tech.

Monolithic Power (MPWR)

In Ultra Modern Electronic Manufacturing Factory Design Engineer in Sterile Coverall Holds Microchip with Gloves and Examines it.. Semiconductor stocks

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Monolithic Power Systems (NASDAQ:MPWR), is a heavyweight in the realm of high-performance power solutions. They’re experts in crafting advanced semiconductor tech that efficiently manages and distributes electrical power.

MPWR is a top semiconductor stock because of their strategic partnership with Vanguard International Semiconductor Corporation (NYSE:VIS). So, this clear signal of determination to secure a steady semiconductor supply displays a critical move in today’s fiercely competitive market.

In their recent financial performance update for Q2, they raked in $441.1 million in revenue. While this marked a slight dip from the previous quarter, it’s noteworthy that revenue exceeded the same quarter last year.

Their gross margin, a profitability yardstick, saw a modest decline in both GAAP and non-GAAP figures. Operating expenses edged up compared to the YOY, resulting in a dip in GAAP operating income.

Additionally, the semiconductors from this partnership will cater to the surging demand for power devices across various sectors, including data centers, electric vehicles, solar inverters, robotics, and space systems. This diversification sets up MPWR for future growth and solidifies their reputation as forward-thinking players.

ASML Holding (ASML)

Closeup of mobile phone screen with ASML logo on computer keyboard

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ASML Holding (NASDAQ:ASML) is a semiconductor trailblazer with a mission  to create cutting-edge chip fabrication tools. Recently, they reported their second quarter 2023 results, which were nothing short of impressive.

In that quarter, they showed €6.9 billion (or $7.3 billion) in net sales, boasting a solid 51.3% gross margin, translating to €1.9 billion (or $2 billion) in net income. This underscores their ability to generate hefty revenues and stay profitable in a cutthroat market.

ASML forecasts future net sales between €6.5 billion and €7.0 billion for the third quarter, with a gross margin of around 50%. Furthermore, they anticipate substantial net sales growth in 2023, approximately 30% higher than 2022, indicating a rosy outlook.

The company is creating crucial technology for crafting high-performance, energy-efficient chips with applications spanning healthcare, climate change, and sustainable energy. This mission is in sync with the objectives of the European Commission and its member states to drive innovation and tackle societal challenges. This partnership is part of an Integrated Projects of Common European Interest (IPCEI) proposal, showcasing ASML’s commitment to advancing semiconductor technology in Europe.

As of this writing, Gabriel Osorio-Mazzilli did not hold (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 Publishing Guidelines

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.

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