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Given the huge demand for semiconductor chips across various industries, governments worldwide are implementing measures to address the lingering supply-demand imbalance by helping semiconductor makers ramp up production. Increasing subsidies and investments should help semiconductor companies benefit from the sky-high demand. Despite the chip shortage, the global semiconductor industry witnessed 27.6% year-over-year sales growth in the third quarter. And rising investor optimism in this space is evident in the SPDR S&P Semiconductor ETF’s (XSD) 18.8% gains over the past month, versus the SPDR S&P 500 Trust ETF’s (SPY) 4.8% returns. The global semiconductor market is expected to grow at a 7.7% CAGR to $778 billion by 2026. So, both AMD and ADI should benefit.
But, while ADI has gained 25.1% in price year-to-date, AMD has surged 38.9%. AMD is a clear winner with 40.8% gains versus ADI’s 12.7% returns in terms of their past month’s performance. But which of these stocks is a better pick now? Let’s find out.
