3 Stocks to Buy as Semiconductor Sales Skyrocket on AI Optimism July 10, 2025

Become a Forbes member and gain unlimited access to bold ideas shaking up industries, expert guides and practical investment advice that keeps you ahead of the market. TSMC remains the world’s premier semiconductor foundry, with its 3nm process technology in full production and 2nm development progressing well. The company’s geographical diversification strategy is reducing political risks.

Investing in Semiconductor Stocks via smallcase

Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success. Finally, you can invest in what are likely the companies you are most familiar with. These are the chip designers and business-to-consumer brands like NVIDIA and AMD. It’s a large building with hundreds or even thousands of network and computer infrastructures that can transfer large amounts of data.

Since 1988 it has more than doubled the S&P 500 with an average gain of +23.62% per year. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations.

Therefore, it is crucial to carefully assess these risks and consider diversifying your investment portfolio before buying semiconductor shares.
In a quickly changing and diverse industry like semiconductors, ETFs can provide exposure to the sector as a whole while not risking individual stocks’ volatility.
The semiconductor industry has shown remarkable resilience and growth, with the global market expected to reach $640 billion in 2025, representing a 10% increase from 2024.
TSMC’s colossal investment in Arizona seems to be a strategic move to mitigate potential risks and strengthen its position in the global semiconductor market.
But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.
In 2024, Nvidia clocked new revenue records, driven largely by growth in their data center segment, which CEO Jensen Huang terms “AI factories.”

Indices and Market Movers

The company’s strong financial health and strategic positioning in high-growth markets suggest that Nvidia’s stock may offer significant upside potential for investors looking at 2024 and beyond. The semiconductor industry is on a transformative growth path, marked by an increasing demand from Best semiconductor stocks sectors like technology, automotive and consumer electronics. The overall health of the global economy also plays a role in the performance of the semiconductor sector.

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Micron has emerged as a leader in high-bandwidth memory (HBM) solutions crucial for AI applications. The company’s advanced manufacturing processes and focus on specialty memory products have improved its market position. Nvidia has transformed from a graphics-focused company into a titan in AI, data center and automotive markets. Their GPUs are pivotal in training AI models, making them indispensable in tech giants’ data centers. Here’s a comprehensive guide to help you invest in the best semiconductor stocks on the stock market. The best chip stock depends on your targeted end market (e.g. smartphones, PCs, data centers, gaming, etc.).

Additionally, it provides services such as the installation of electric grids, asset assessment and security, asset maintenance, upgrades, repairs and more. The semiconductor industry in India is crucial for the economy as it drives the technology sector’s growth. Currently, India relies entirely on imports for semiconductors, mainly from Taiwan, China, Korea and Vietnam. However, with the increasing demand for electronic devices, there is an urgent need to reduce this dependence.

The report further projects that by 2032, the U.S. will hold a 28% share of advanced semiconductor (sub-10nm) manufacturing capacity and capture 28% of global capital expenditures (capex) in the sector. Investors should analyze a company’s financial health, market position, research and development capabilities, and growth potential in emerging technologies. Understanding the specific drivers of semiconductor demand, such as advancements in 5G, AI and IoT, can also provide valuable insights into which companies are well-positioned for future growth. In terms of valuation, TSM’s stock offers an attractive investment opportunity despite its premium valuation that reflects its superior growth prospects, operational efficiencies and strategic industry position. The company’s pivotal role in the future of technology and the high barriers to entry for its level of advanced manufacturing justify the stock’s long-term value potential.

While its valuation metrics may appear high relative to historical standards, they are justified by Nvidia’s potential for continued leadership and growth in key technology sectors.
Semiconductor companies design and manufacture computer chips and related components.
Advanced Energy Industries, Inc. is one of the leading suppliers of power subsystems and process-control technologies to the semiconductor industry.
Wipro’s expertise in semiconductor engineering makes it a valuable player in this industry.

Nvidia

These companies design chips and then ask foundries like TSMC to produce them. Given that TSM makes most of Apple’s chips, you can see why it is considered an important global company. Here are a couple of stocks to consider when thinking about how to invest in semiconductor stocks. Semiconductors, or chips as they are also referred to, are integral components of almost every form of technology.

Before you dive head first into buying semiconductor stocks, it’s important to know which company makes which type of chips and what industries it operates in. Semiconductors are at the heart of the artificial intelligence (AI) boom, powering everything from advanced chatbots and sprawling data centers to smart devices and edge computing. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.

TSM specializes in fabrication operations rather than the research and design of new and innovative chips, meaning it commands lower margins than some of the flashier semiconductor stocks out there. But since many leading firms are fundamentally “fabless,” meaning they have no manufacturing capacity of their own, there is built-in business for TSM every year as it is contracted to turn designs into real hardware. In the realm of best semiconductor stocks, Broadcom stands as a major Western player with an impressive portfolio of over 17,000 patents.

It’s also one of the better performers on this list, in part because this Taiwanese chipmaker is also one of the smallest. While revenue slumped over the last fiscal year, ADI is tracking a double-digit growth rate in 2024 as a sign that things are looking up. Shares slightly topped the performance of the S&P 500 across all of 2023, but more importantly they are up significantly from their 52-week low in October 2023. Taiwan Semiconductor, as the name implies, is located in the Asia-Pacific region. That proximity to big APAC technology firms has provided it with deep relationships as a key supplier for the region. To maximize your credit score increase you need to choose the best rent reporter for you.

Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. In the PC market, Qualcomm has expanded its computer portfolio with the Snapdragon X Plus Platform, tailored towards upcoming launches of next-generation AI PCs. Today, Qualcomm has also pivoted to a strong automotive focus via their Snapdragon X platforms. These platforms aim aiming to transform vehicles with advanced connectivity and autonomous driving features. These AI systems require immense computational power to process complex algorithms and vast amounts of data.

However, when compared to other S&P 500 sector indices, it ranks seventh in performance, as of February 19. Still, the sector continues to outperform the broader S&P 500 Index, which has posted a 4.5% gain so far in 2025. Intel’s competitive advantage is multifaceted, stemming from its integrated design and manufacturing model, which allows for a rapid response to market changes and customer needs. This vertical integration, combined with Intel’s global brand recognition and market penetration, provides a significant edge over competitors. Intel’s ongoing efforts to improve its manufacturing capabilities and expand its product offerings in high-growth areas further solidify its market position.