5 Best Semiconductor Stocks According to Billionaires

In this article, we discuss the 5 best semiconductor stocks according to billionaires. To read the detailed analysis of the semiconductor industry, go directly to the 10 Best Semiconductor Stocks According to Billionaires.

5. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Billionaire Investors: 17

Dollar Value of Billionaire Holdings: $5.99 billion

Advanced Micro Devices, Inc. (NASDAQ:AMD) is a California-based company that manufactures and sells high-performance computing, graphics, and visualization technologies.

On December 6, Advanced Micro Devices, Inc. (NASDAQ:AMD) unveiled its new artificial intelligence accelerator, Instinct MI300X, which the CEO of the company called the most advanced accelerator in the industry.

On December 7, Citi reaffirmed a Buy rating on Advanced Micro Devices, Inc. (NASDAQ:AMD)’s stock with a $136 price target. The analyst pointed out that the corporation’s top customers are Meta Platforms, Inc. (NASDAQ:META) and Microsoft Corporation (NASDAQ:MSFT). The analyst further mentioned that the company’s demonstration of its  MI300 chip’s metrics outperformed that of NVIDIA Corporation (NASDAQ:NVDA)’s H100.

Artisan Partners commented on Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second quarter 2023 investor letter. Here is what it said:

“Among our top contributors were Advanced Micro Devices, Inc. (NASDAQ:AMD), NU Holdings and Netflix. AMD’s data center CPUs are used in the cloud service provider (CSP) servers. In addition to the broader secular tailwind from cloud adoption, the company has a performance and pricing advantage over Intel, which we believe will enable it to continue capturing market share. However, the recent stock price rally was due to growing excitement around the company’s AI exposure. It will launch its new MI300 graphics processing unit (GPU) chip later this year to compete against the dominant market leader NVIDIA. Similar to its approach that won market share from Intel within the CPU market, AMD’s product will aim to provide similar performance at a more attractive price. AMD is already working with Microsoft and Meta, while Amazon publicly stated that it is evaluating AMD’s inferencing chips. Using assumptions around the total GPU market size, potential market share gains and price points, our research indicates this could be a $20 billion opportunity for AMD. That would nearly double its revenue. While the company has not historically missed many deadlines, there is execution risk as it works to manufacture and distribute these complex chips at scale, which, combined with an elevated valuation after the stock’s strong performance run, led us to trim the position.”

4. Applied Materials, Inc. (NASDAQ:AMAT)

Number of Billionaire Investors: 18

Dollar Value of Billionaire Holdings: $$1.587 billion

Applied Materials, Inc. (NASDAQ:AMAT) is engaged in the manufacturing and development of semiconductor and display equipment.

In the third quarter, 18 billionaires had investments in Applied Materials, Inc. (NASDAQ:AMAT)’s stock at a combined value of $1.587 billion.

On December 8, Applied Materials, Inc. (NASDAQ:AMAT) declared a quarterly dividend of $0.32, payable by March 14 to the shareholders of record on February 22. The company has a dividend yield of 0.87% at the time of writing on December 8.

Generation Investment Management commented on Applied Materials, Inc. (NASDAQ:AMAT) in its second quarter 2023 investor letter. Here is what it said:

“Applied Materials, Inc. (NASDAQ:AMAT): Semiconductor revenue has grown 6% per year since 2010, driven by increasing demand for smartphones, datacentres and electronic content in vehicles and industrial settings.4 Through work spanning six roadmaps covering many sub-themes within semiconductors (including industry consolidation, capital equipment and generative AI), we are confident that these trends will continue or even accelerate in the coming decades. The rise of generative AI in particular will require high-performing semiconductors, such as Nvidia’s GPUs, in datacentres.

Traditionally the industry relied on semiconductor manufacturers to deliver steady advances in semiconductor performance while reducing costs. This phenomenon is known as Moore’s Law, which was identified by Intel founder Gordon Moore. Traditionally, Moore’s Law relied on shrinking the light source used to expose photosensitive material on a silicon wafer to make smaller semiconductors, which in turn led to falling costs.

In recent years, however, Moore’s Law has slowed. Manufacturing has run up against the limits of physics. Making semiconductors smaller more cheaply has therefore become difficult. The latest generation of lithography machines that create this light source are marvels of modern science, but they are also expensive to produce, not to mention power-hungry. Delivering performance improvements in the most advanced semiconductors is now becoming costlier. This presents a risk, both to generative AI and a net zero world.

All is not lost, however. The semiconductor industry attracts some of the best minds in the world, many of whom are looking at alternative ways to continue to deliver more power-efficient and cheaper semiconductors. A key area of focus is around developing new materials used in manufacturing semiconductors, and new ways of applying (‘deposition’) and selectively removing (‘etch’) these materials to create the desired semiconductor. Applied Materials is one of the companies in the vanguard of these developments…” (Click here to read the full text)

3. Lam Research Corporation (NASDAQ:LRCX)

Number of Billionaire Investors: 19

Dollar Value of Billionaire Holdings: $3.137 billion

Lam Research Corporation (NASDAQ:LRCX) is an American semiconductor materials and equipment company. It offers wafer-fabrication equipment and related services. The company is headquartered in California.

Lam Research Corporation (NASDAQ:LRCX) has a nine-year history of dividend raises. On November 9, the company declared a $2.00 per share quarterly dividend, payable by January 3 to the shareholders of record on December 13. At the time of writing on December 8, Lam Research Corporation (NASDAQ:LRCX) had a dividend yield of 1.14%.

As of the third quarter of 2023, 19 billionaires had a stake in Lam Research Corporation (NASDAQ:LRCX), making it the third-best semiconductor stock according to billionaires.

2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Billionaire Investors: 20

Dollar Value of Billionaire Holdings: $5.316 billion

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) provides semiconductor foundry services and provided services to 532 customers and developed 12,698 products in 2022.

On November 28, Bernstein raised the price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s stock to $125 from $113 and maintained an Outperform rating. It also called the stock its Best Idea for 2024. 

According to Insider Monkey’s database, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the top semiconductor stocks per billionaires as the company shares were owned by 20 billionaires in the third quarter at a combined value of $5.316 billion.

Wedgewood Partners commented on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its third quarter 2023 investor letter. Here is what it said:

“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted from performance, as revenues declined 10% from a year ago. The Company is lapping revenue growth of over +40% (compared to 2022) during every quarter of 2023, so it is more instructive to look at the health of the business through the lens of a multi-year timeframe. Most of the Company’s customers have seen near-term weakness in demand due to pandemic normalization. However, we think the longer-term trend of more silicon per device is still very much intact, and the Company is well-positioned to serve this, given its commanding market share in leading edge capacity. The Company’s aggressive investment in leading-edge equipment combined with tight development with fabless IC designers, plus the embrace of open development libraries, should continue to foster a superior competitive position and attractive long-term growth.”

1. NVIDIA Corporation (NASDAQ:NVDA)

Number of Billionaire Investors: 29

Dollar Value of Billionaire Holdings: $15.395 billion

NVIDIA Corporation (NASDAQ:NVDA) is one of the biggest semiconductor companies in the world that sells its products under the brands GeForce NOW, Quadro, GeForce, SHIELD, vGPU, DOCA, JESTON, and Bluefield.

According to Insider Monkey’s database that tracks 910 elite hedge funds, hedge fund sentiment was positive toward NVIDIA Corporation (NASDAQ:NVDA) in Q3, as 180 funds had a stake in the company, compared to 175 in the previous quarter. Billionaire Rajiv Jain’s GQG Partners was the most prominent investor in the company with 14.04 million shares worth $6.1 billion.

Out of the 34 Wall Street analysts that covered NVIDIA Corporation (NASDAQ:NVDA) over the last three months, 31 kept a Buy rating on the stock. The average price target of $661 had an upside of 38.94% at the time of writing on December 8.

ClariVest Asset Management, LLC mentioned NVIDIA Corporation (NASDAQ:NVDA) in its third quarter 2023 investor letter. Here is what it said:

“During the third quarter of 2023, an underweight to real estate and an overweight to healthcare helped performance, while an overweight to information technology and an underweight to energy detracted. Stock selection was strong within information technology and consumer staples but was weak within financials and communication services. NVIDIA Corporation (NASDAQ:NVDA) designs, develops and markets 3D graphics processors and related software. The company also expanded its partnership with Google Cloud to advance AI computing, software and services.”

You can also look at the 12 Most Undervalued Blockchain Stocks To Buy According To Hedge Funds and the 12 Best Healthcare Stocks For the Long-Term.

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