Best Gallium Nitride Stocks to Buy

The microchip and semiconductor market is massive and growing rapidly. As technology sectors like 5G, electric cars and IoT advance, the market will likely continue to grow for decades. The bad news is that the silicon used to make chips is approaching its limit. However, the good news is that gallium nitride stocks might take technology to the next level.

Gallium nitride stocks can allow chips to do more with less. The more the world uses technology, the more power it needs to run the hardware. More power means higher temperatures. Using gallium nitride allows the transistors on chips to run at higher temperatures. For example, electric cars use significantly more chips than gas cars. The electricity and friction in electric cars make them very hot when driven. Gallium nitride could replace silicon, which risks melting in electric cars.

As a bonus, these gallium nitride stocks have experience in the chip-making process. Gallium nitride is already used in chips on a small scale. That could mean that chip makers will need very little investment of time and money to start using gallium nitride at a full-scale level. Gallium nitride stocks could see rapidly growing demand if that is the case.

Because gallium nitride is more efficient than silicon, less energy is lost as heat. That could mean that gallium nitride chips can become smaller and less expensive. Gallium nitride stocks allow chips to operate at higher voltages and waste less energy as heat. That would also mean that tech using gallium nitride have less need for cooling systems. Read on for more info on gallium nitride stocks.

The Best Gallium Nitride Stocks To Watch

No. 5 Qorvo (Nasdaq: QRVO)

QRVO is a leading chip maker for the 5G market. The company noted in its most recent annual report, “The continuing migration to 5G is increasing the content opportunity for Qorvo’s high-performance infrastructure products. This includes those featuring our gallium nitride and gallium arsenide technologies.” Additionally, in February 2020, Qorvo bought Custom MMIC for $92 million. Custom MMIC supplies gallium nitride circuits to the defense and commercial aerospace markets.

Qorvo reported full-year results in May. For its fiscal year 2022, the company reported earnings per share grew 45% to $9.26. Qorvo stock is down almost 50% this year and trades at a P/E ratio of 11.1x.

No. 4 Lantheus Holdings (Nasdaq: LNTH)

LNTH is a healthcare stock focusing on imaging diagnostics and targeted therapeutics. In other words, their products and drugs help find and fight cancer. According to its annual report, Lanthues’s Gallium-67 product is an injectable radiopharmaceutical imaging agent to detect certain infections and cancerous tumors, especially lymphoma.

Lantheus recently bought competitor Progenics. According to a recent investor presentation, the combined company will have a robust portfolio and pipeline of precision diagnostic and therapeutic products. In addition, it will have an attractive financial profile and strengthened cash flow generation. And attention to cost synergy opportunities that support enhanced stockholder returns. The gallium stock is up an eye-popping 144% this year and does not pay a dividend.

No. 3 Axt (Nasdaq: AXTI)

AXTI is a material science company specializing in chip wafers containing gallium. According to its website, the company’s wafer substrates are used when a typical silicon wafer substrate cannot meet the performance requirements of a semiconductor or optoelectronic device. Axt’s end markets include 5G, data centers, medical testing, lighting, and lasers.

As the market for their chips grows, finding raw materials could become difficult if new competitors enter the market. To get ahead of the curve, Axt has invested in ownership interests in ten raw material companies in China. Furthermore, the company has a board seat in all ten companies. Axt stock is down 50% this year. Now the stock trades at a P/E ratio of 12.5x.

The Bottom Line on Gallium Nitride Stocks

Investors seeing a growing market for the technological advancements the gallium nitride stocks can offer have plenty of options to choose from. The biggest breakthroughs may still be coming.  And as always when it comes to new technologies, please base all investment decisions on your own due diligence.