A Cantor Fitzgerald report on the semiconductors and semiconductor equipment industry outlined their top picks for 2024. The report sees 14% upside on average for the 18 stocks it covers.
Cantor Fitzgerald’s Top Stock Picks for 2024
The top stock picks include NVIDIA Corp, Western Digital Corp, ASML Holding NV, NXP Semiconductors NV, and GlobalFoundries Inc. The report projects 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, Advanced Micro Devices Inc, and Marvell Technology Inc.
However, three names – Qualcomm Inc, Teradyne Inc, and Intel Corp – fell in the Neutral rating category, with Cantor expecting them to be relative underperformers.
The Cyclical Recovery Is Different This Time
The semiconductor industry is undergoing a cyclical recovery, with the PHLX Semiconductor Sector Index soaring 95% since hitting its bottom in October 2022. Similar trends have been observed in the iShares Semiconductor ETF.
The industry’s core fundamentals reached their low point in the second quarter of 2023, signaling a significant upward shift. This recovery sets itself apart from previous cycles due to unique factors such as varying lead times, inventory builds, and supply/demand dynamics, leading to increased volatility across different end markets.
The current cycle positions AI, PC/Smartphones, Data Center/Networking as potential gainers, while Industrials and Auto may enter a downcycle phase, according to analysts.
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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