MW Were you interested in semiconductor stocks three months ago? Check them out now.
By Philip van Doorn
If you are confident that trade conflicts will be worked out, you may find that shares of chip makers are now attractively priced
Semiconductor stocks were tech darlings over the past two years. And now, with prices driven lower by President Donald Trump's ever-changing trade policies, long-term investors may have opportunities to scoop up some bargains.
Let's begin with a chart showing the movement of forward price-to-earnings ratios for Nvidia Corp.'s stock $(NVDA)$ over the past two years:
These are prices divided by consensus earnings-per-share estimates for rolling 12-month periods among analysts polled by FactSet. For two years through Monday, Nvidia Corp.'s share price rose 314%, while its forward P/E ratio declined to 23.2 from 55.5. Normally, if a stock rose fourfold, one would expect its P/E ratio to have increased. But Nvidia's earnings estimates have outpaced the company's incredible growth as it has dominated the market for graphics processing units used to develop generative artificial intelligence technology.
What should you think of Nvidia's P/E valuation? Looking at current valuations and earnings estimates, the S&P 500 SPX trades at a forward P/E of 18.3. That is down a bit from 18.5 two years ago, but the index's forward P/E over the past two years was as high as 22.6 in December.
So Nvidia remains more expensive than the S&P 500. Is that justified? It might be, based on comparisons of expected growth rates for revenue and profit.
According to FactSet's consensus estimates, adjusted for calendar years for companies (such as Nvidia) whose fiscal years don't match the calendar, the S&P 500's revenue per share is expected to increase at a compound annual growth rate of 6% from 2024 through 2026, while its earnings per share are expected to increase at a CAGR of 13.1%. For Nvidia, the expected sales CAGR from calendar 2024 through 2026 is 40.8% and the expected EPS CAGR is 41.4%.
Those figures seem to provide plenty of support for Nvidia's modest P/E premium to the S&P 500.
And now, you might ask, what about the "E" in the forward P/E ratio? That is the question of the moment, in light of Trump's "liberation day" tariff announcement on April 2, which has been followed by a 90-day delay for most of the new tariffs, as well as by retaliatory trade moves from China and a continual flow of reports on which industries might enjoy tariff reprieves from Trump.
The situation is fluid. For example, China has ordered its airlines to stop taking delivery of new aircraft from the U.S., according to a Bloomberg report on Tuesday.
Getting back to Nvidia, the company's rolling 12-month earnings-per-share estimate is $4.77, which is up from $4.74 on April 1, the day before Trump's tariff announcement. Meanwhile, the consensus estimate for Nvidia's EPS for calendar 2025 has declined by a penny to $4.40 and the estimate for calendar 2026 has declined by 4 cents to $5.65.
In a note to clients about semiconductor stocks last week, TD Cowen analyst Joshua Buchalter wrote that "the unknowable impact from a trade war on demand [was] the real concern."
Buchalter wrote that with computer chips present "in anything with an on/off switch" at a time when "the world's biggest economy seems intent on unwinding globalization," reduced demand was likely to push sales and EPS estimates lower for semiconductor manufacturers.
He summed up the problem for analysts and investors: "We struggle to estimate sales and cost reduction efforts in this unprecedented demand environment and thus keep our models roughly unchanged instead of guessing blindly."
That said, even if consensus estimates for Nvidia's sales and earnings come down significantly, it might still be considered a cheap stock because the expected growth rates now are so much higher than those for the S&P 500.
So this is a moment when you as a long-term investor might form your own opinions about how the companies you research are likely to weather a potential demand storm. Meanwhile, we can present some data for semiconductor stocks.
Semiconductor screens
To screen the semiconductor industry, we started with the 30 companies whose stocks or American depositary receipts are included in the PHLX Semiconductor Index SOX, which is tracked by the iShares Semiconductor ETF SOXX. This exchange-traded fund was down 20% for 2025 through Monday, following gains of 12% in 2024 and 66% in 2023. All price changes in this article exclude dividends.
SOXX trades at a forward P/E of 18.4, which is only slightly higher than the S&P 500. But FactSet's estimates show revenue for the SOXX portfolio increasing at a CAGR of 10.7% from 2024 through 2026 with an expected EPS CAGR of 21.2% - both considerably higher than the above estimates for the S&P 500.
To broaden our initial list, we added 33 more companies in the S&P Composite 1500 Index XX:SP1500 that are 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 MidCap 400 MID and the S&P Small Cap 600 SML.
Following are snapshots of three groups from the screen.
Largest semiconductor companies
Here are the largest 15 semiconductor companies screened, sorted by market capitalization:
Company Ticker Forward P/E Two-year estimated sales CAGR through 2026 Two-year estimated EPS CAGR through 2026 2025 price change Market cap ($bil) Nvidia Corp. NVDA 23.2 40.8% 41.4% -18%$2,701 Broadcom Inc. AVGO 24.9 17.6% 112.0% -23%$839 Taiwan Semiconductor Manufacturing Co. ADR TSM 16.4 21.4% 23.2% -21%$808 ASML Holding NV ADR ASML 25.0 12.7% 20.6% -3%$265 Qualcomm Inc. QCOM 11.5 5.6% 14.9% -9%$154 Advanced Micro Devices Inc. AMD 18.5 21.6% 148.9% -22%$154 Texas Instruments Inc. TXN 26.5 10.9% 14.2% -19%$137 Applied Materials Inc. AMAT 15.0 6.1% 13.0% -11%$117 ARM Holdings PLC ADR ARM 51.2 24.6% 80.9% -15%$110 KLA Corp. KLAC 20.8 8.9% 20.8% 6%$89 Analog Devices Inc. ADI 22.6 12.1% 68.5% -16%$89 Intel Corp. INTC 29.0 4.0% N/A 1%$89 Lam Research Corp. LRCX 17.7 8.9% 13.2% -6%$87 Micron Technology Inc. MU 7.4 23.5% 74.3% -16%$79 Marvell Technology Inc. MRVL 17.5 32.1% N/A -53%$45 Source: FactSet
Click on the tickers for more information about each company.
Read: Tomi Kilgore's detailed guide to the information available on the MarketWatch quote page
The expected EPS CAGR for Intel $(INTC)$ and Marvell $(MRVL)$ are marked "N/A" because both companies showed negative earnings for calendar 2024. Analysts expect Intel to swing from a net loss of $4.38 in 2024 to positive EPS of 51 cents in 2025 and $1.17 in 2026. For Marvell, analysts expect improvement from a net loss of $1.25 a share in calendar 2024 to positive EPS of $2.71 in 2025 and $3.62 in 2026.
Nvidia is the largest semiconductor manufacturer by market cap and also has the highest expected sales CAGR for any of the 63 stocks in our initial semiconductor screen. It is the sixth most expensive stock on the list on a forward P/E basis.
Many of the stocks on this list of the largest semiconductor companies have higher expected EPS CAGR than Nvidia.
Semiconductor companies with highest expected sales growth rates through 2026
MW Were you interested in semiconductor stocks three months ago? Check them out now.
By Philip van Doorn
If you are confident that trade conflicts will be worked out, you may find that shares of chip makers are now attractively priced
Semiconductor stocks were tech darlings over the past two years. And now, with prices driven lower by President Donald Trump's ever-changing trade policies, long-term investors may have opportunities to scoop up some bargains.
Let's begin with a chart showing the movement of forward price-to-earnings ratios for Nvidia Corp.'s stock (NVDA) over the past two years:
These are prices divided by consensus earnings-per-share estimates for rolling 12-month periods among analysts polled by FactSet. For two years through Monday, Nvidia Corp.'s share price rose 314%, while its forward P/E ratio declined to 23.2 from 55.5. Normally, if a stock rose fourfold, one would expect its P/E ratio to have increased. But Nvidia's earnings estimates have outpaced the company's incredible growth as it has dominated the market for graphics processing units used to develop generative artificial intelligence technology.
What should you think of Nvidia's P/E valuation? Looking at current valuations and earnings estimates, the S&P 500 SPX trades at a forward P/E of 18.3. That is down a bit from 18.5 two years ago, but the index's forward P/E over the past two years was as high as 22.6 in December.
So Nvidia remains more expensive than the S&P 500. Is that justified? It might be, based on comparisons of expected growth rates for revenue and profit.
According to FactSet's consensus estimates, adjusted for calendar years for companies (such as Nvidia) whose fiscal years don't match the calendar, the S&P 500's revenue per share is expected to increase at a compound annual growth rate of 6% from 2024 through 2026, while its earnings per share are expected to increase at a CAGR of 13.1%. For Nvidia, the expected sales CAGR from calendar 2024 through 2026 is 40.8% and the expected EPS CAGR is 41.4%.
Those figures seem to provide plenty of support for Nvidia's modest P/E premium to the S&P 500.
And now, you might ask, what about the "E" in the forward P/E ratio? That is the question of the moment, in light of Trump's "liberation day" tariff announcement on April 2, which has been followed by a 90-day delay for most of the new tariffs, as well as by retaliatory trade moves from China and a continual flow of reports on which industries might enjoy tariff reprieves from Trump.
The situation is fluid. For example, China has ordered its airlines to stop taking delivery of new aircraft from the U.S., according to a Bloomberg report on Tuesday.
Getting back to Nvidia, the company's rolling 12-month earnings-per-share estimate is $4.77, which is up from $4.74 on April 1, the day before Trump's tariff announcement. Meanwhile, the consensus estimate for Nvidia's EPS for calendar 2025 has declined by a penny to $4.40 and the estimate for calendar 2026 has declined by 4 cents to $5.65.
In a note to clients about semiconductor stocks last week, TD Cowen analyst Joshua Buchalter wrote that "the unknowable impact from a trade war on demand [was] the real concern."
Buchalter wrote that with computer chips present "in anything with an on/off switch" at a time when "the world's biggest economy seems intent on unwinding globalization," reduced demand was likely to push sales and EPS estimates lower for semiconductor manufacturers.
He summed up the problem for analysts and investors: "We struggle to estimate sales and cost reduction efforts in this unprecedented demand environment and thus keep our models roughly unchanged instead of guessing blindly."
That said, even if consensus estimates for Nvidia's sales and earnings come down significantly, it might still be considered a cheap stock because the expected growth rates now are so much higher than those for the S&P 500.
So this is a moment when you as a long-term investor might form your own opinions about how the companies you research are likely to weather a potential demand storm. Meanwhile, we can present some data for semiconductor stocks.
Semiconductor screens
To screen the semiconductor industry, we started with the 30 companies whose stocks or American depositary receipts are included in the PHLX Semiconductor Index SOX, which is tracked by the iShares Semiconductor ETF SOXX. This exchange-traded fund was down 20% for 2025 through Monday, following gains of 12% in 2024 and 66% in 2023. All price changes in this article exclude dividends.
SOXX trades at a forward P/E of 18.4, which is only slightly higher than the S&P 500. But FactSet's estimates show revenue for the SOXX portfolio increasing at a CAGR of 10.7% from 2024 through 2026 with an expected EPS CAGR of 21.2% - both considerably higher than the above estimates for the S&P 500.
To broaden our initial list, we added 33 more companies in the S&P Composite 1500 Index XX:SP1500 that are 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 MidCap 400 MID and the S&P Small Cap 600 SML.
Following are snapshots of three groups from the screen.
Largest semiconductor companies
Here are the largest 15 semiconductor companies screened, sorted by market capitalization:
Company Ticker Forward P/E Two-year estimated sales CAGR through 2026 Two-year estimated EPS CAGR through 2026 2025 price change Market cap ($bil)
Nvidia Corp. NVDA 23.2 40.8% 41.4% -18%$2,701
Broadcom Inc. AVGO 24.9 17.6% 112.0% -23%$839
Taiwan Semiconductor Manufacturing Co. ADR TSM 16.4 21.4% 23.2% -21%$808
ASML Holding NV ADR ASML 25.0 12.7% 20.6% -3%$265
Qualcomm Inc. QCOM 11.5 5.6% 14.9% -9%$154
Advanced Micro Devices Inc. AMD 18.5 21.6% 148.9% -22%$154
Texas Instruments Inc. TXN 26.5 10.9% 14.2% -19%$137
Applied Materials Inc. AMAT 15.0 6.1% 13.0% -11%$117
ARM Holdings PLC ADR ARM 51.2 24.6% 80.9% -15%$110
KLA Corp. KLAC 20.8 8.9% 20.8% 6%$89
Analog Devices Inc. ADI 22.6 12.1% 68.5% -16%$89
Intel Corp. INTC 29.0 4.0% N/A 1%$89
Lam Research Corp. LRCX 17.7 8.9% 13.2% -6%$87
Micron Technology Inc. MU 7.4 23.5% 74.3% -16%$79
Marvell Technology Inc. MRVL 17.5 32.1% N/A -53%$45
Source: FactSet
Click on the tickers for more information about each company.
Read: Tomi Kilgore's detailed guide to the information available on the MarketWatch quote page
The expected EPS CAGR for Intel (INTC) and Marvell (MRVL) are marked "N/A" because both companies showed negative earnings for calendar 2024. Analysts expect Intel to swing from a net loss of $4.38 in 2024 to positive EPS of 51 cents in 2025 and $1.17 in 2026. For Marvell, analysts expect improvement from a net loss of $1.25 a share in calendar 2024 to positive EPS of $2.71 in 2025 and $3.62 in 2026.
Nvidia is the largest semiconductor manufacturer by market cap and also has the highest expected sales CAGR for any of the 63 stocks in our initial semiconductor screen. It is the sixth most expensive stock on the list on a forward P/E basis.
Many of the stocks on this list of the largest semiconductor companies have higher expected EPS CAGR than Nvidia.
Semiconductor companies with highest expected sales growth rates through 2026
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MW Were you interested in semiconductor stocks -2-
Going back to our full list of 63 semiconductor companies, we pared the group to 58 that are covered by at least five analysts working for brokerage or research firms polled by FactSet. Here are the 10 with the highest revenue CAGR expected from 2024 through 2026:
Company Ticker Forward P/E Two-year estimated sales CAGR through 2026 Two-year estimated EPS CAGR through 2026 2025 price change Nvidia Corp. NVDA 23.2 40.8% 41.4% -18% Marvell Technology Inc. MRVL 17.8 32.1% N/A -53% Silicon Laboratories Inc. SLAB 73.8 27.9% N/A -27% SolarEdge Technologies Inc. SEDG N/A 26.8% N/A 2% SiTime Corp. SITM 79.1 25.9% N/A -36% First Solar Inc. FSLR 6.5 24.9% 45.0% -26% ARM Holdings PLC ADR ARM 50.5 24.6% 80.9% -15% Micron Technology Inc. MU 7.5 23.5% 74.3% -16% Wolfspeed Inc. WOLF N/A 22.6% N/A -68% Advanced Micro Devices Inc. AMD 18.7 21.6% 148.9% -22% Source: FactSet
Two companies - SolarEdge and Wolfspeed - have no forward P/E ratios available because their 12-month EPS estimates are negative.
For five companies on this second list, there are no EPS CAGR available because their calendar 2024 EPS (as adjusted by FactSet if necessary) were negative:
-- Marvell's MRVL EPS is expected to swing from a net loss of $1.25 a share in 2024 to positive EPS of $2.71 in 2025 and $3.62 in 2026.
-- Silicon Laboratories SLAB lost $5.93 a share in 2024. Analysts expect the company's EPS to swing positive, to 65 cents a share in 2025 and $2.67 in 2026.
-- SolarEdge SEDG lost $31.64 a share in 2024 and is expected to lose $2.79 a share in 2025. The company is expected to post a profit of 46 cents a share in 2026.
-- SiTime SITM lost 4.05 a share in 2024. It is expected to be profitable with EPS of $1.48 in 2025 and $2.43 in 2026.
-- Wolfspeed WOLF lost $7.68 a share in 2024. It is expected to lose $2.81 a share in 2025 and to remain in the red with a net loss of $1.66 a share in 2026.
Analysts' favorite semiconductor stocks
For this next list, we pared the list of 63 companies to 44 covered by at least 10 analysts polled by FactSet. Twelve of these companies are rated a buy or the equivalent by at least 80% of the analysts. Here they are, sorted by the 12-month upside for the stocks implied by the consensus price targets:
Company Ticker April 15 price Cons. Price target Implied 12-month upside potential Two-year estimated sales CAGR through 2026 Two-year estimated EPS CAGR through 2026 Marvell Technology Inc. MRVL $52.26 $108.34 52% 32.1% N/A Semtech Corp. SMTC $27.00 $55.58 51% 13.0% N/A MKS Instruments Inc. MKSI $68.48 $126.00 46% 6.5% 74.2% Onto Innovation Inc. ONTO $120.77 $218.13 45% 10.5% 34.0% Micron Technology Inc. MU $71.02 $127.85 44% 23.5% 74.3% First Solar Inc. FSLR $131.26 $231.55 43% 24.9% 45.0% Entegris Inc. ENTG $72.85 $124.70 42% 7.8% 48.1% Taiwan Semiconductor Manufacturing Co. ADR TSM $155.84 $240.93 35% 21.4% 23.2% Nvidia Corp. NVDA $110.71 $169.74 35% 40.8% 41.4% ASML Holding NV ADR ASML $672.87 $924.10 27% 12.7% 20.6% Broadcom Inc. AVGO $178.36 $243.68 27% 17.6% 112.0% Allegro MicroSystems Inc. ALGM $22.01 $30.00 27% 11.4% N/A Source: FactSet
Once again there are no estimated EPS CAGR for some of the companies, because they lost money during calendar 2024:
-- Marvell lost $1.25 a share during calendar 2024. The company is expected to be profitable in 2025 with EPS of $2.71 and to earn $3.62 a share in 2026.
-- Semtech SMTC lost $6.11 a share in calendar 2024. It is expected to earn $1.60 a share in 2025 and $2.15 a share in 2026.
-- Allegro Microsystems ALGM lost 34 cents a share last year. It is expected to swing to positive EPS of 44 cents a share in 2025 and 82 cents in 2026.
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-Philip van Doorn
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