Pursuing prosperity and enduring success requires a keen eye for innovation, adaptability, and strategic foresight. In this era of rapid technological advancements and economic challenges, identifying companies hibernating for remarkable growth is complicated. The article explores the corridors of three diverse enterprises that move as waves of excellence and resilience. It also touches on unstoppable stocks to buy today.
The first stock, a semiconductor powerhouse, rides the waves of transformation in an industry characterized by constant flux. Likewise, the second one, deeply embedded in the tech realm, capitalizes on the insatiable demand for cloud-based services and AI-driven technologies. Meanwhile, the third one, in maritime commerce, thrives through its strategic vision and adaptability in turbulent seas.
Axcelis (ACLS)
Axcelis (NASDAQ:ACLS) may attain rapid value growth, as observed in its progressive financial performance. To begin with, in Q2 2023, the company maintained a high backlog of $1.2 billion, with quarterly system bookings reaching $193 million. Looking forward, Axcelis raised its 2023 revenue forecast by $70 million to over $1.1 billion. This upward revision represents YoY revenue growth of approximately 20%, an impressive feat in an industry where overall wafer fabrication equipment (WFE) may decline by 20% to 30%.
Additionally, One of Axcelis’s key strengths lies in its mature process technology market dominance. In Q2, 93% of the company’s system shipments were directed toward mature foundry logic customers. The remaining 7% was allocated to memory customers, primarily Dynamic Random-Access Memory (DRAM) applications. This makes it one of those unstoppable stocks to buy.
At its core, the semiconductor industry’s shift toward silicon carbide is a significant growth driver for Axcelis. Silicon carbide is witnessing strong demand, especially within the Purion product family. Notably, approximately 60% of the company’s system revenue in 2023 may come from the power segment, with silicon carbide applications contributing around 35% to total system revenue.
Fundamentally, Axcelis actively engages with customers in the high-growth silicon carbide segment. The adoption of Purion H200 silicon carbide and Purion XE silicon carbide systems is rising, with three Purion H200 silicon carbide evaluations underway globally. These evaluations offer customers a competitive advantage by enabling them to qualify productivity-limiting recipes as they scale up production. In 2023, revenue from silicon carbide customers is anticipated to be evenly distributed across the Purion Power Series product family.
Therefore, as the semiconductor industry evolves and demand for silicon carbide surges, Axcelis may capitalize on these opportunities.
Celestica (CLS)
Celestica’s (NYSE:CLS) impressive growth is closely tied to its hyperscale customer base. These are tech giants like Amazon (NASDAQ:AMZN) Web Services, Microsoft (NASDAQ:MSFT) Azure, and Google (NASDAQ:GOOG) Cloud, who have been driving the digital transformation and cloud computing revolution.
Over the last 12 months (ended Q2 2023), Celestica’s revenue from hyperscalers amounted to approximately $2.5 billion. The hyperscaler segment’s robustness signifies a remarkable 50% compound annual growth rate (CAGR) since 2018. It signifies that Celestica is well-entrenched in a rapidly expanding market. The hyperscalers continuously expand their data centers and infrastructure to cater to the increasing demand for cloud-based services, AI, and machine learning.
One of the key drivers of Celestica’s growth is the substantial investments by hyperscalers in AI and ML. These technologies are at the forefront of innovation, with applications spanning from natural language processing to autonomous vehicles. To operate AI and ML workloads efficiently, hyperscalers need high-performance hardware, which Celestica specializes in. All in all, it’s one of those unstoppable stocks to consider.
Fundamentally, hyperscalers are not merely investing in AI but are fiercely competing to enhance their AI and ML capabilities. This intense competition leads to continuous orders for Celestica’s products. The need for specialized hardware, such as custom silicon, graphics processing units (GPUs), and tensor processing units (TPUs), has significantly benefited Celestica’s portfolio.
In detail, AI and ML workloads generate massive amounts of data that require rapid processing. This, in turn, necessitates a robust networking infrastructure. Celestica is a market leader in 400G switches, and it’s actively producing 800G switches.
Finally, the migration from 400G to 800G is not only a sign of hyperscalers continuing to expand their data center capabilities, but their networking requirements may also intensify, further fueling Celestica’s growth.
International Seaways (INSW)
International Seaways (NYSE:INSW) has a clear path to rapid growth and sustained success. First, focus on operational efficiency. The company’s cash flow for the next 12 months is impressively low, at under $16,000 daily. The figure incorporates approximately $3,500 per day from fixed contracted revenue, totaling over $350 million through charter expiry.
Also, this low cash breakeven level positions INSW to operate profitably even during challenging market conditions. It cushions against volatile freight rates and enables the company to navigate market downturns effectively.
On the other hand, International Seaways’ strategic investments in vessel acquisitions and newbuilding programs are instrumental in its growth trajectory. The recent order of two LR1 vessels, set for delivery in the second half of 2025, demonstrates the company’s forward-thinking approach.
Notably, these LR1 vessels will be scrubber-fitted and class-certified for LNG conversion, aligning with evolving environmental regulations. These vessels’ aggregate price of $115 million includes essential equipment considerations, ensuring their readiness.
As a measure of its capabilities, the LR1 Panamax international joint venture, in which INSW participates, has consistently outperformed the broader market, with its vessels, on average, earning $67,000 per day YTD. Furthermore, the recent delivery of dual-fuel VLCCs adds another dimension to INSW’s growth story. These VLCCs are on-time charters for the next seven years, guaranteeing fixed base earnings with profit-sharing opportunities. The strong TCEs (time charter equivalent) of approximately $43,000 per day in Q2 2023 validate the profitability of these investments.
Lastly, the company’s strong presence in these crucial trade routes and ability to adapt to changing trade flows position it as a reliable and preferred partner for its clients. This makes it one of those unstoppable stocks to buy.
On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
