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.
AAPL
STZ
TSLA
AMZN
With Nvidia 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 :
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.
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:
Click on the tickers for more about each company, including share-price ratios and analysts' ratings.
Click here for Tomi Kilgore's detailed guide to the wealth of information available for free on the MarketWatch quote page.
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