Top Semiconductor Stock (Excluding Nvidia) to Buy Aggressively in the Latter Half of 2024

In 2024, Nvidia (NASDAQ: NVDA) has been dominating the stock market with a staggering 145% year-to-date gain. At one point, its market cap even surpassed $3.4 trillion, making it the most valuable company in the world. However, due to its size and valuation relative to earnings, Nvidia may not deliver a comparable gain in the second half of the year. This opens up opportunities for investors to explore other stocks that could drive their portfolios forward.

One such stock to consider is Axcelis Technologies (NASDAQ: ACLS), a key service provider to the semiconductor industry. Despite a remarkable 800% increase in its stock price over the last five years, it remains significantly undervalued compared to its peers. With a promising forecast for the second half of 2024, Axcelis could be an ideal addition to your portfolio.

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Axcelis’ role in the semiconductor space is critical, as it manufactures ion implantation equipment essential for producing processors, memory chips, and storage chips. As demand for artificial intelligence (AI) continues to grow across various sectors, including data centers and devices, the need for advanced chip technology is becoming increasingly evident.

Micron Technology predicts that next-generation AI computers will require up to 80% more DRAM capacity than traditional computers, while AI-enabled smartphones could demand twice as much memory. This shift towards AI applications presents a significant opportunity for Axcelis, as CEO Russell Lowe anticipates a surge in demand for semiconductor manufacturing equipment to meet the growing needs of the industry.

Despite a slight revenue drop in the first quarter of 2024, Axcelis is gearing up for a resurgence in the second half of the year. With a track record of strong growth in the previous years, the company is well-positioned to capitalize on the expanding semiconductor market. Additionally, Axcelis’ projected revenue of $1.3 billion in 2025 and a substantial order backlog of $1.1 billion indicate a promising outlook for the company.

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In terms of valuation, Axcelis stock remains attractively priced despite its impressive performance over the past five years. With a low price-to-earnings (P/E) ratio compared to industry benchmarks like the iShares Semiconductor ETF and the S&P 500 index, Axcelis presents a compelling investment opportunity for those looking to capitalize on the AI revolution.

As the AI trend continues to gain momentum, Axcelis stands to benefit from increased demand for its semiconductor equipment. With the potential for significant growth in the coming years, investing in Axcelis Technologies could prove to be a lucrative opportunity for investors seeking exposure to the semiconductor industry.

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