Why Nvidia and Intel Are in the Top 5
Semiconductor stocks have been outperforming the market have attracted widespread investors’ interest. When selecting stocks, investors look at various variables, and market capitalization or market cap is the most common variables.
Market cap is calculated by multiplying the stock price by the number of shares outstanding. It tells us the cost of acquiring a company in the open market. Investors use this metric to understand the size of a company.
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Large-cap companies are a safe investment because they have been operating for a long time and are key players in their industry. Investing in large-cap companies doesn’t necessarily bring huge returns in the short-term, though they can bring steady growth in the long-term. Hence, risk-averse investors often invest in large-cap companies.
Top five semiconductor stocks by market cap
As of September 12, 2017, TSMC (TSM) had the largest market cap of $188 billion, followed by Intel (INTC) at $168 billion, Nvidia (NVDA) at $101.4 billion, Broadcom (AVGO) at $101 billion, and Texas Instruments (TXN) at $81.4 billion.
- TSM is the largest third-party foundry in the world and the sole manufacturer of Apple’s (AAPL) A11 processors for iPhone 8. TSM’s stock is now trading near its 52-week high of $37.94.
- Intel is the largest manufacturer of PCs (personal computer), server processors, and integrated graphics card and a key player in the non-volatile memory market. The stock is now trading at ~$36.0.
- Nvidia is a leader in the discrete GPU (graphics processing unit) market and is ahead of competitors in the emerging markets of AI (artificial intelligence) and autonomous vehicles. Its stock price has grown more than fourfold in the past two years, and the stock is now trading at ~$169.0.
- Broadcom was listed in the top five after the Avago-Broadcom merger made it the world’s largest communications semiconductor company. The stock is now trading ~$247.0, which is near its 52-week high of $259.36.
- Texas Instruments, the largest analog chipmaker in the world, is now trading ~$83.0, which is near its 52-week high of $84.65.
Notably, we’ve excluded Samsung (SSNLF) from the list as its core business is mobile handsets and consumer electronics. If we include Samsung, it ranks at the top, with a market cap of $319 billion as on September 12, 2017.