In this article, we shall discuss the 10 best nanotechnology stocks to buy now. To skip our detailed analysis of the nanotechnology sector in 2022 and the future of nanotech, go directly and see 5 Best Nanotechnology Stocks to Buy Now.
Nanotechnology is the manipulation of matter on a close-to atomic scale to develop new structures, materials, and devices. Developed in the late 1980s, nanotechnology has since transformed numerous industries like medicine, consumer products, energy, materials and manufacturing. The concept is best explained by Chad Mirkin, a Northwestern University’s professor of chemistry and materials science:
“Everything, when miniaturized to the sub-100-nanometer scale, has new properties, regardless of what it is. This is what makes nanoparticles the materials of the future. They have strange chemical and physical properties compared to their larger-particle kin. The thing that matters about nanoparticles is their scale. The smaller you go, the ratio of surface to bulk atoms goes up. At a larger scale, the atoms at the surface are relatively inconsequential. But at nanoscales, you could have a particle that is almost all surface. Those atoms begin to contribute very significantly to the overall properties of the material.”
Photo by L N on Unsplash
Global Nanotechnology Industry: An Outlook
Amid the COVID-19 crisis, the global market for nanotechnology was estimated to be around $54.2 billion in 2020. Since then, the figure has been revised to project an overall expected market worth of $126.8 billion by 2027, growing at a CAGR of 12.9% over the analysis period 2020-2027. The market is highly diversified into multiple segments, one of them being Nano Materials. The Nano Materials segment is projected to grow at a CAGR of 13% to reach $107.4 billion by the end of the aforementioned analysis period. The segment currently accounts for a little more than 15% of the global nanotechnology market.
According to recent reports, the countries dominating the global nanotechnology sector in 2022 are China, the United States, India, Iran, Germany, Russia and the United Kingdom. The United States accounts for more than 29.5% of the global market size while China accounts for 29.53%, making the latter the largest nanotechnology contributor in the world. China is expected to reach an estimated market size of $22.1 billion at the end of the analysis period. Among noteworthy geographic markets which are rapidly becoming players on the global stage are Japan and Canada, each forecast to grow at more than 11%, respectively, over the 2020-2027. Some of the largest players in the market today are Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), Intel Corp (NASDAQ:INTC), and Thermo Fisher Scientific Inc. (NYSE:TMO).
Our Methodology
For this article, we looked at Insider Monkey’s database which tracks 920 elite hedge funds and identified some of the most popular stocks which use nanotechnology or produce products related to nanotechnology. Then, we picked 10 stocks with strong fundamentals, positive analyst ratings, or a favorable hedge fund sentiment.
The stocks have been ranked based on the number of hedge funds which hold stakes in them, from lowest to highest.
Best Nanotechnology Stocks to Buy Now
10. VEECO Instruments Inc. (NASDAQ:VECO)
Hedge Fund Holdings: 15
Based in Plainview, New York, VEECO Instruments Inc. (NASDAQ:VECO) is a global capital equipment supplier which specializes in the design and manufacture of processing systems for different technologies. In 2017, the company acquired Cambridge Nanotech, an innovator in atomic layer deposition. In Q3 2022, VEECO Instruments Inc. (NASDAQ:VECO) posted an EPS of $0.45, beating estimates of $0.41 by $0.04. The company beat consensus expectations of $170.9 million, posting a Q3 2022 revenue of $171.9 million. Like Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), Intel Corp (NASDAQ:INTC), and Thermo Fisher Scientific Inc. (NYSE:TMO), VEECO Instruments Inc. (NASDAQ:VECO) is one of the best nanotechnology stocks to buy now.
On November 15, Benchmark analyst Mark Miller lowered the price target on VEECO Instruments Inc. (NASDAQ:VECO) to $25 from $35, keeping a Buy rating on the shares. According to the analyst, while there was significant upside in the company’s Q3 2022 earnings when compared to Q2 2022, the tenuous macroeconomic climate is likely to catch up with the stock. However, the company sees strong demand in areas like advanced packaging and MOCVD, which the stock is well-leveraged to capitalize upon. In light of this, VEECO Instruments Inc. (NASDAQ:VECO) remains significantly undervalued on the assumption of long-term revenue growth of more than 9%.
9. PPG Industries Inc. (NYSE:PPG)
Hedge Fund Holdings: 34
Based in Pittsburgh, Pennsylvania, PPG Industries Inc. (NYSE:PPG) is an American company and global supplier of paints, coatings, and specialty materials. The company is actively involved in nanotechnology, from Research and Development to the sale of multiple products which contain nanoparticles. In Q3 2022, PPG Industries Inc. (NYSE:PPG) beat EPS estimates of $1.65 by $0.01, posting earnings of $1.66 per share. Hedge fund sentiment around the stock increased in Q3 2022, with 34 funds long the stock, up from 22 in the preceding quarter.
On November 10, Deutsche Bank analyst David Begleiter lowered the price target on PPG Industries Inc. (NYSE:PPG) to $128 from $130, keeping a Buy rating on the shares. The analyst was impressed by exceptional Q3 2022 returns and reiterated the moat-worthy stock has a history of demonstrating exceptional pricing power. It has an impressive track record of delivering shareholder returns via share buybacks and dividend growth, recently declaring a $0.62 dividend in October. Due to this, the analyst reckons the stock is drastically mispriced with respect to its strong fundamentals and favorable potential.
Here is what ClearBridge Investments had to say about PPG Industries Inc. (NYSE:PPG) in their Q1 2022 investor letter:
“While commodities-exposed areas of the materials sector such as mining and steel fared well in the quarter, we tend to have less direct exposure to commodities across our portfolio. Holdings like paint and coating company PPG Industries (NYSE:PPG) that use natural gas and oil related products as feedstock into their products faced sharp input cost escalation, driving meaningful margin compression, which was not well-received by investors. While negative in the short term, we remain confident that the company will be able to adjust pricing accordingly and recover margins over the medium term.”
8. IBM Corp. (NYSE:IBM)
Hedge Fund Holdings: 40
Based in Armonk, New York, IBM Corp. (NYSE:IBM) is an American multinational technology corporation which specializes in the production and sale of hardware, middleware and software. The company also provides hosting and consulting services in diverse areas, ranging from mainframe computers to nanotechnology. In Q3 2022, IBM Corp. (NYSE:IBM) posted earnings of $1.81 per share, beating estimates of $1.77 by $0.04.
IBM’s (NYSE:IBM) Software and Consulting services are projected to gain from increasing demand in hybrid cloud and AI markets across the globe. While the company operates in a highly competitive industry, the global shift in favor of cloud-based services will boost top-line growth in the long-run. The company’s blockchain segment is well-leveraged to carry the company through macroeconomic headwinds, and a volatile foreign exchange situation. And although IBM’s (NYSE:IBM) Q3 2022 returns were not exceptional, growth catalysts like IFS and hybrid cloud will aid the company in restoring a positive growth trend.
7. DuPont de Nemours Inc. (NYSE:DD)
Hedge Fund Holdings: 45
Based in Wilmington, Delaware, DuPont de Nemours Inc. (NYSE:DD) is an American multinational chemical company which uses nanotechnology to develop synthetic polymers like nylon, Mylar, and Kevlar. Investor interest around DuPont de Nemours Inc. (NYSE:DD) increased in the third quarter of 2022, with 45 hedge funds having significant stakes in the stock. This was up from the previous quarter, in which only 44 hedge funds were long the stock.
On November 28, Argus analyst Bill Selesky raised the price target on DuPont de Nemours Inc. (NYSE:DD) to $81 from $76, keeping a Buy rating on the shares. According to the analyst, negative factors which have been challenging DuPont (NYSE:DD), like semiconductor shortages, supply-chain disruptions, and raw material cost inflation, are slowly dissipating. Furthermore, Selesky ascertains that the company’s portfolio transformation is nearly complete and if the company can show stable demand and/or margins, its multiple can expand. The 16% share buyback is also a huge advantage for investors, especially at the stock’s current valuation.
6. Cadence Design Systems Inc. (NASDAQ:CDNS)
Hedge Fund Holdings: 46
Headquartered in San Jose, California, Cadence Design Systems Inc. (NASDAQ:CDNS) is an American multinational computational software company which produces software, hardware, and silicone structures for integrated circuits.
On November 15, Needham analyst Charles Shi maintained his Buy rating and $200 price target on Cadence Design Systems Inc. (NASDAQ:CDNS) shares, citing the company’s Q3 2022 consensus beat. According to the analyst, the company’s stellar returns were based on emulation strength and exceptional prototyping hardware sales. Furthermore, Shi emphasized that consistent with his view, the company’s China export restrictions did not impact the overall outlook of the stock in Q3 2022. The company also has an exceptionally strong upfront product delivery model. Q4 2022 revenue is projected to range between $870 million to $890 million, beating consensus estimates of $866.6 million.
Hedge fund sentiment around Cadence Design Systems Inc. (NASDAQ:CDNS) became more favorable, as 46 hedge funds were long the stock in Q3 2022. This was a substantial increase compared to Q2 2022, when only 39 funds had stakes in Cadence (NASDAQ:CDNS). In Q3 2022, the company posted a total revenue of $903 million, beating consensus $871.04 million. Cadence Design Systems Inc. (NASDAQ:CDNS) posted an EPS of $1.06 in Q3 2022, beating estimates of $0.97 by $0.09.
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Disclosure: none. 10 Best Nanotechnology Stocks to Buy Now is originally published on Insider Monkey.
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