The world is being “digitized,” and besides software, semiconductors are the "nuts and bolts" making it all happen (in datacenters, on devices, in the cloud and just about everywhere else too, considering the expansive "Internet of Things" ("IoT")). In this report, we share data on 40+ top semiconductor stocks, ranked by net profit margins (a particularly important metric in the currently challenging macroeconomic environment). We have a special focus on Monolithic Power Systems (MPWR) an "offense-and-defense" chip stock, including a review of its business, financials, valuation and risks. We conclude with our strong opinion on investing in semiconductors in general, and Monolithic Power in particular.
Top Chip & Hardware Stocks Benefiting from AI and Cloud Migration
In this report, we review market sector performance. Technology continues to dominate, semiconductors in particular. We consider the themes behind the sector strength (e.g. Artificial Intelligence and the digitization of everything), and then dive into our top semiconductor (and related hardware) companies benefiting from the secular trends, including our current holdings.
Wide Moat Semiconductor Company: Two Massive Secular Trends
The non-mega-cap semiconductor company we review in this report is growing rapidly as it benefits from two massive secular trends: (1) the cloud (and artificial intelligence), and (2) dramatically increasing technology in the automotive industry (i.e. its chips have increasing applications in new cars). Also, this wide-moat founder-led company has impressive profit margins (important in the current macro environment), and generates tons of cash (for increasing dividends and share repurchases). If you are looking for an attractive “offense-and-defense” investment opportunity, these shares are worth considering.