Despite the global shortage of semiconductors, the industry’s stocks are recording significant returns for investors. The returns highlight the sector’s potential despite the shortage.
According to data compiled by Finbold, the top five selected semiconductor stocks have recorded an average Return On Investment (ROI) of 100.59% between June 28, 2020, and June 28, 2021. During the same period, the top ten selected semiconductor stocks recorded an average ROI of 78.79%
NVIDIA Corporation ranks top with a return of 107.87%, followed by the Taiwan Semiconductor Manufacturing Company Limited at 106.87%. Lattice Semiconductor Corporation ranks third with an ROI of 102.94%, followed by ON Semiconductor Corporation at 96.49%, while NXP Semiconductors N.V. had a return of 88.78%.
Other stocks with notable returns include Micron Technology (69.16%), Tower Semiconductor (56.55%), QUALCOMM (56.38%), Texas Instruments Incorporated(52.52%), and Broadcom (50.35%).
5G shift driving demand in semiconductors
The report notes that the semiconductor industry has witnessed increased demand mainly due to technological advancements. According to the research report:
“For instance, the global shift to the 5G network is crucial for the stocks’ performance. Notably, there is an aggressive shift towards 5G, with the technology promising higher speeds. Moreover, as more manufacturers phase out 4G phones, semiconductors are gaining prominence resulting in a surge in demand.”
Furthermore, the report notes the pandemic’s role in the growth of semiconductor stocks. The report notes:
“The positive returns have also resulted from the pandemic, creating a tremendous need for connectivity and conferencing solutions globally. In turn, this has driven demand for both in the cloud for the answers that allow people to collaborate and end-user devices such as personal computers and tablets that heavily depend on the semiconductor industry.”
Based on the increasing utilization of chips in different sectors, semiconductor stocks are likely to keep growing.