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Leverage the benefits of semiconductor stocks in 2024 by investing in these stocks

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Published Date: 20 Feb 2024Updated Date: 20 Feb 20246 mins readBy MOFSL
Best semi conductor stocks

Best Semiconductor Stocks to Buy for High Returns in 2024

With technology and AI taking over the world, it is no surprise that the demand for semiconductor stocks is peaking. These stocks are growing and will keep growing with technology. If you are looking to invest in stocks in 2024, consider semiconductor stocks.

Confused about which one to invest in? We are here to help you. First, let us understand what semiconductor stocks are and how they work.

What do you mean by semiconductor stocks?

To start with, semiconductors, made up of silicon and germanium, are materials capable of regulating the flow of electricity. Unlike metals with high resistance, semiconductors efficiently enable temperature adjustments in devices. These semiconductors are found in various electronic devices since they are crucial in managing and moderating electrical conductivity. But why are semiconductor stocks significant?

The simple reason is that semiconductors are present in almost every gadget you use today. From your credit card and TV remote to the vehicles you travel in contain semiconductors. Even AI, and all modern technologies use semiconductors. One cannot imagine a life without semiconductors, making them all the more precious. 

This could be the best time for you to invest in semiconductors since the government of India is subsidising the production cost of semiconductors to encourage more companies in India to manufacture semiconductors in-house to avoid reliance on international imports. This will eventually increase production and sales, allowing you to yield growth in your investments.

What are the best semiconductor stocks to invest in 2024?

Now that you know what semiconductor stocks mean and why you should invest in them, let us identify some stocks expected to grow in 2024.

L&T Technology Services

Established in 2012, LTTS is an engineering services provider delivering solutions in engineering, research and development, and digitalisation across various industries. The company serves 69 Fortune 500 companies with clients across 25+ countries worldwide.

LTTS has had a great track record of an ROE of 23.7% in 3 years and has also maintained a dividend payout of 38%, which makes it a great investment option.

Tata Elxsi Ltd

Tata Elxsi is a prominent provider of design and technology services, specialising in automotive, broadcast, communications, healthcare, and transportation. It is also a globally recognised brand, offering integrated solutions and adapting to up-and-coming technology to meet customer needs.

Elxsi has projected a profit of 25.7% CAGR over the last five years and continues to deliver a dividend payout of 59.8%. It has also maintained an ROE of 36.8% in 3 years, making it a promising stock.

Aeroflex Industries Ltd

Established in 1993, Aeroflex Industries Ltd is a leading Indian manufacturer of stainless steel and bronze metallic flexible flow solutions. The company has actively maintained environmental sustainability and aims to deliver efficient services and high-quality products to diverse clients in India and 80+ countries.

Aeroflex is almost debt-free and has an impressive CAGR of 252% over the last five years. It has also maintained an ROE of 29.3% in 3 years.

Cyient Ltd

Cyient, formerly Infotech Enterprises Limited, is an Indian multinational technology company specialising in engineering, manufacturing, data analytics, and networks and operations. Established in 1991 in Hyderabad, it is one of the world's top 30 outsourcing companies.​​​​​​​

Cyient provides a good dividend of 52.7% and an ROE of 16.6%, which is a good sign for your investment.

Dixon Technologies (India) Ltd

Dixon Technologies (India) Ltd is a design-centric solutions company that dominates India's consumer durables, lighting, and smartphone manufacturing. Being one of India's largest LED TV manufacturers, Dixon caters to over 35% of the country's demand.

Dixon has relatively reduced debt and has delivered a profit growth rate of 33.3% CAGR in the past five years. It also provides an ROE of 22.5%, making it an ideal investment choice.

Conclusion

Semiconductor stocks could be your ideal choice if you want to invest long-term. However, make sure you check your investment portfolio's risk tolerance before making any decisions. Remember, although semiconductor stocks look promising, the market changes every day, and you need to stay updated to ensure you align your investments according to your financial goals.
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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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