From Morningstar: 2024-09-23 06:52:00

Semiconductor stocks have surged due to the AI revolution, but valuations are high, requiring a selective approach. Morningstar analyst Phelix Lee sees undervalued opportunities in Taiwan Semiconductor Manufacturing and GlobalWafers. The semiconductor index was up 53.07% as of Sept. 17, 2024.

Despite AI growth, cyclical trends and economic moats remain crucial for semiconductor stocks. Semiconductor demand is expected to tighten, with significant recovery projected by 2025. Morningstar recommends Taiwan Semiconductor Manufacturing and GlobalWafers as best-in-class investments, citing their competitive advantages.

Taiwan Semiconductor Manufacturing is praised for its AI exposure, monopoly position, and growth prospects. GlobalWafers benefits from growing silicon wafer demand and a strategic 300mm wafer plant in Texas. Both companies are considered undervalued, with strong potential for future growth and profit.



Read more at Morningstar: 2 Semiconductor Stocks Worth Considering