3 Semiconductor Stocks to Buy on the Dip: June 2024

Core Viewpoint - The semiconductor industry is experiencing a mixed performance, with some companies benefiting from AI advancements while others struggle due to exposure to cyclical markets [1][9]. Group 1: Intel (INTC) - Intel's stock has declined by 35% over the past five years, contrasting sharply with the nearly 400% increase of the Vaneck Semiconductor ETF [2]. - The company is investing significantly in modernization, with $32 billion allocated for Arizona facilities and $28 billion for new fabs in Ohio, supported by the Biden Administration's CHIPs Act [3]. - Despite recent challenges, Intel maintains a robust R&D budget of over $16 billion annually, positioning it to potentially regain competitiveness against rivals like Nvidia and AMD [12]. Group 2: GlobalFoundries (GFS) - GlobalFoundries is a major semiconductor foundry with approximately $7 billion in annual revenues [5]. - The stock has decreased by 15% in the past year, primarily due to its exposure to cyclical industries like automotive [6]. - The company is investing in a new state-of-the-art plant in Saratoga Springs, New York, which may attract clients looking to diversify supply chains amid geopolitical risks [14][17]. Group 3: Photronics (PLAB) - Photronics is currently trading at less than 12 times forward earnings and is considered a strong investment opportunity [7]. - The stock has tripled over the past five years but is down about 20% year-to-date, presenting a favorable entry point for investors [8]. - The company specializes in photomasks, which are essential for semiconductor manufacturing, and is expected to benefit from increased demand driven by AI and IoT applications [15][19].