5 Semiconductor Stocks for the Next 20 Years

1. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 102  

NVIDIA Corporation (NASDAQ:NVDA) operates as a visual computing firm. On July 21, reports indicated that electronics giant Samsung, which makes chips for companies like NVIDIA, was planning to spend $200 billion to set up eleven new chipmaking plants in Texas. The investment will create over 10,000 jobs in the state. The report comes just as lawmakers in the US approved a new plan to boost chip manufacturing in the US to compete with Chinese firms in chip exports around the world. NVIDIA Corporation (NASDAQ:NVDA) will potentially overcome supply constraints by this move. 

On July 25, Barclays analyst Blayne Curtis maintained an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA) stock and lowered the price target to $200 from $295, noting that it was too early to buy the dip in semi stocks. 

At the end of the first quarter of 2022, 102 hedge funds in the database of Insider Monkey held stakes worth $6.3 billion in NVIDIA Corporation (NASDAQ:NVDA), compared to 110 the preceding quarter worth $10.4 billion. 

In its Q1 2022 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:

“NVIDIA Corporation (NASDAQ:NVDA) is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming- focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44% and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.

We expect future growth to remain robust as NVIDIA Corporation (NASDAQ:NVDA) chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”

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