The demand for semiconductors is increasing due to widespread lifestyle and business changes amid rapid digitalization. However, the world is experiencing a semiconductor shortage, which is driving up chip prices. Consequently, we think Micron (NASDAQ:MU) NXP Semiconductors (NASDAQ:NXPI) and NVIDIA (NVDA) should benefit in the foreseeable future. But which of these stocks is a better buy now? Read more to find out.Headquartered in Eindhoven, Netherlands, NXP Semiconductors N.V. 's (NXPI) product portfolio includes microcontrollers, communication processors, analog and interface devices, radio frequency power amplifiers, and security controllers. In comparison, California-based NVIDIA Corporation (NASDAQ:NVDA) is an artificial intelligence computing company that operates in two segments: Graphics and Compute & Networking.
A global semiconductor shortage has impacted several industries, especially the automotive and consumer electronics industries. However, the shortage of semiconductors is causing chip prices to soar, to the industry's significant benefit. Moreover, with increasing demand for electric vehicles (EVs), and growing demand for advanced technologies in hybrid working environments, the industry is expected to see great upside. According to a Technavio report, the global semiconductor market is expected to grow at a 4% CAGR between 2020 -2024. Both NXPI and NVDA should benefit as a result.
NVDA stock price has gained 52.2% over the past nine months, while NXPI returned 51.6%. Also, NVDA’s 80% gains over the past year are higher than NXPI’s 76.7% returns. Furthermore, in terms of the past three months’ performance, NVDA is the clear winner, with 33.5% gains versus NXPI’s 9.7% returns.