Intel, Taiwan Semiconductor, and Texas Instruments are chip stocks to watch
Chip stocks have soared in 2024 thanks to optimism surrounding artificial intelligence (AI). According to the Semiconductor Industry Association (SIA), global chip sales totaled $149.9 billion in the second quarter, up 18.3% from 12 months ago. Elsewhere the World Semiconductor Trade Statistics (WSTRS) is forecasting $611.2 billion in global sales by the year's end
Between traditional AI and new generative AI technology, semiconductor firms are on a spending spree as they look to replicate the success of sector leader Nvidia (NVDA). However, as the hype cycle runs out of steam, chipmakers have faltered recently as all that spending has yielded little in actual production. What's left is a sector a lot more palatable for investors from a value standpoint.
As such, it's worth taking a look at some important companies in the industry and see where they stack up to the more well-known names.
Intel Corp (NASDAQ:INTC) sports a 60.6% year-to-date deficit, thanks in large part to a massive 26.1% post-earnings drawdown on Aug. 2. It was INTC's worst single-session decline on record, moved the stock to its lowest level since February 2012, and wiped out roughly $35 billion in market value.
In a decision that could prove to be reminiscent of the Blockbuster and Netflix (NFLX) battle of the early 21st century, it was later revealed that Intel passed on an opportunity to take a 15% stake -- roughly $1 billion -- in OpenAI roughly seven years ago. With OpenAI now valued at roughly $80 billion, Intel -- the once darling of the computer age -- is left playing catch up with less popular firms.
Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) boasts the largest chip foundry in the world, and is a massive supplier to the U.S. and China. Shares are up 73% over the last 12 months and 56.2% in 2024, both of which beat the VanEck Semiconductor ETF (SMH). Last seen up 4.7% at $162.32, TSM is chasing its July 11 record high of $193.47.
In terms of market capitalization, Texas Instruments Inc (NASDAQ:TXN) sits outside of the top 10. A recent pullback was saved by the 150-day moving average right at the $180 mark. Now, Texas Instruments stock sports a modest 12.8% year-to-date lead, and touched an all-time high of $210.84 on July 17.