Wall Street Favorites: 3 Semiconductor Stocks with Strong Buy Ratings for March 2024

Josh Enomoto

March 11, 2024 4 min read

With artificial-intelligence-related semiconductor stocks flying into low-earth orbit, you may be left wondering if there are alternative opportunities in the space. There are – and they enjoy the highest level of endorsement among Wall Street analysts.

We must start, though, with a word of caution. Thanks to the stratospheric rise of companies like Nvidia (NASDAQ:NVDA), the fervor has dramatically lifted all boats. Therefore, many semiconductor stocks will likely require forward-looking price adjustments. Right now, a good chunk of the top players have already exceeded prior average expectations.

Still, with so much interest in the burgeoning ecosystem, you may be enticed to take a risk. If that’s you, here are the strong buy semiconductor stocks to put on your short list.

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Taiwan Semiconductor (TSM)

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A multinational semiconductor contract manufacturing and design company, Taiwan Semiconductor (NYSE:TSM) is the world’s second-most valuable semiconductor company, per its public profile. Further, it’s the world’s largest dedicated independent semiconductor foundry. Because of its pertinence to the global computer chip supply chain, it commands huge geopolitical implications.

Unsurprisingly, TSM stock has been on a strong run this year, gaining 44% of equity value since the January opener. Per covering analysts, they anticipate revenue this fiscal year to come in at $84.86 billion. If so, that would represent a 22% lift from last year’s print of $69.4 billion.

Even better, they view 2025 revenue hitting $101.38 billion. That would be a massive 19.7% leap from 2024’s projected top line. For 2024 and 2025, earnings per share may reach $5.75 and $7.03, respectively.

Lastly, the experts rate TSM shares as a unanimous strong buy. Notably, the highest price target of $185 implies upside potential of more than 26%. Therefore, it’s one of the semiconductor stocks to consider.

ASML (ASML)

Closeup of mobile phone screen with ASML logo on computer keyboard

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Specialized equipment and services firm ASML (NASDAQ:ASML) easily ranks among the top semiconductor stocks to consider if you’re looking for highly endorsed enterprises. It might not be a household name in the traditional sense. However, it’s the leading supplier of photolithography systems, which are essential for the production of integrated circuits (ICs) and microchips.

Here’s the deal with ASML stock: since the start of the year, it’s already enjoyed a robust performance. So, some concerns exist about betting on the entity now. Further, analysts project that by the end of this fiscal year, sales will land at $30.42 billion. That’s less than 1% higher than last year’s print of $30.18 billion.

At the same time, the experts believe 2025 sales will hit $37.91 billion, which would be a 24.6% leap from 2024’s projected top line. Also, it’s important to emphasize how critical ASML is to the broader semiconductor supply chain.

Analysts peg shares a consensus strong buy with a high-side target of $1,050.

STMicroelectronics (STM)

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Based in Switzerland, STMicroelectronics (NYSE:STM) is a multinational semiconductor company that designs, manufactures and sells semiconductor products used in various electronic applications. Primarily, the company focuses on microcontrollers or small computing devices used to control various functions in electronic systems. As well, it features relevancies in analog integrated circuits (ICs) or components that process continuous signals (i.e. sound, temperature, etc.) and converting them into digital data.

Stated differently, there’s a very high chance that you’re using STMicroelectronics’ various innovations without actively knowing about it. Many of the company’s products are integrated into everyday products and systems: smartphones, automotive systems, home appliances, industrial equipment and more.

Admittedly, the forward-looking framework is a bit questionable. Analysts project 2024 sales to land at $16.17 billion, which is 6.4% below last year’s tally. However, they also anticipate 2025 sales to reach $17.56 billion by 2025.

Overall, covering experts rate STM a strong buy with a $48.40 price target. The high-side estimate calls for $55 per share. It’s one of the semiconductor stocks to consider for the long haul.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.