Now that investors and analysts have had a few weeks to digest Nvidia Corp.’s artificial-intelligence bombshell on May 24, it is time to screen semiconductor stocks to see which players in this dynamic industry are expected to grow most rapidly through 2025.
predicting a 50% sequential increase in quarterly sales, and its founder and CEO Jensen Huang attributing much of that growth to expansion of data centers to serve companies deploying AI, you might think you already know which company will top the screen. But that jump in revenue has been incorporated into analysts’ estimates, so we’re looking further ahead.
The following screen is based on consensus estimates for calendar-year revenue from a 2023 baseline through 2025. We’re using calendar-year estimates for a uniform set of data, because many companies’ fiscal years don’t match the calendar. For example, Nividia’s most recent quarterly financial report was for the first quarter of its fiscal 2024, which ended April 30, 2023.
Before going to the stock screen, here’s a comparison of weighted aggregate estimates for sales per share for the iShares Semiconductor Index exchange-traded fund
which tracks the industry benchmark PHLX Semiconductor Index
of 30 large manufacturers of chips and related equipment, and for the SPDR S&P 500 ETF Trust
|ETF||2023 estimated sales per share||2024 estimated sales per share||2025 estimated sales per share||Two-year estimated sales CAGR|
|iShares Semiconductor ETF||$84.50||$93.23||$98.75||8.1%|
|SPDR S&P 500 ETF Trust||$180.45||$188.83||$199.23||5.1%|
The SOXX group is expected to show a much higher compound annual growth rate (CAGR) for sales for 2024 and 2025 than that of SPY.
Semiconductor sales growth screen
For a broader screen, we began with the SOXX 30 and added other components of the S&P Composite 1500 Index
in the semiconductor industry, as determined by FactSet, or in the “Semiconductors and Semiconductor Equipment” Global Industry Classification Standard group. The S&P Composite 1500 is made up of the S&P 500, the S&P 400 Mid Cap Index
and the S&P Small Cap 600 Index
This brought our initial list to 60 companies whose shares or American depositary receipts (ADRs) are listed on U.S. exchanges. Among these, consensus sales estimates through calendar 2025 among at least five analysts polled by FactSet were available for 41 companies.
Based on the estimates, 16 of the companies are expected to achieve two-year compound annual growth rates of 15% or more for sales through calendar 2025:
|Company||Ticker||Estimated 2023 sales ($mil)||Estimated 2024 sales ($mil)||Estimated 2025 sales ($mil)||Two-year estimated sales CAGR through 2025|
|First Solar Inc.||FSLR||$3,494||$4,596||$5,604||26.6%|
|Enphase Energy Inc.||ENPH||$3,054||$3,829||$4,753||24.7%|
|SolarEdge Technologies Inc.||SEDG||$4,127||$5,062||$5,919||19.8%|
|Taiwan Semiconductor Manufacturing Co. Ltd. ADR||TSM||$70,944||$86,048||$100,798||19.2%|
|Universal Display Corp.||OLED||$575||$694||$813||18.9%|
|Onto Innovation Inc.||ONTO||$813||$926||$1,130||17.9%|
|Silicon Laboratories Inc.||SLAB||$1,010||$1,153||$1,380||16.9%|
|Monolithic Power Systems Inc.||MPWR||$1,841||$2,136||$2,492||16.3%|
|Power Integrations Inc.||POWI||$546||$673||$734||16.0%|
|Advanced Micro Devices Inc.||AMD||$22,989||$27,144||$30,738||15.6%|
Click on the tickers for more about each company, including share-price ratios and analysts’ ratings.