As we approach the new year, investors will be evaluating the best stocks to consider, and the technology sector is definitely on the radar.
Semiconductor stocks will be a particular target because of their influence in the fabric of artificial intelligence. With that said, here are three top semiconductor stocks to invest in heading into 2025.
One company capitalizing on the recent demand for AI chips is Broadcom AVGO. A major supplier to Apple AAPL.. Broadcom, which designs custom AI accelerators for data centers, recently announced that it has secured two hyperscale data center customers, rumored to be Alphabet GOOGL. and metaplatform META or something like Amazon AMZN and Microsoft MSFT.
These strategic partnerships make Broadcom’s growth story very attractive, as it is considered the second largest AI semiconductor supplier.
Pivoting to Nvidia NVDA, the largest AI chip maker. Nvidia’s Blackwell series AI chips face some challenges with overheating, but are considered the most high-performance AI chips on the market.
Additionally, Nvidia’s H100 and H200 series chips are driving significant growth, with the company’s total revenue expected to be $129.02 billion in fiscal 2025. This is an increase of more than 1000% from the beginning of the decade, when 2020 sales were $10.91 billion.
Image source: Zacks Investment Research
Surprisingly, NVDA’s price performance is more than double the company’s sales growth rate, with FY2026 sales expected to grow an additional 48% to $191.84 billion. Worth noting.
Image source: Zacks Investment Research
Last but not least is Taiwan Semiconductor TSM. The company is also a major supplier to Apple, the world’s largest integrated circuit foundry (IC) provider. Although Taiwan Semiconductor does not directly manufacture AI chips, it provides foundries that help other companies, including Nvidia, make AI chips.
What’s appealing to investors is that TSM has the lowest forward P/E ratio of 29.2x on the list. Even better, Taiwan Semiconductor is expected to achieve double-digit sales and bottom line growth this year and FY25.
Image source: Zacks Investment Research
conclusion
With the global market for artificial intelligence estimated to be worth trillions of dollars over the next few years, these top semiconductor stocks should be lucrative investments heading into 2025. Until that point, Broadcom, Nvidia, and Taiwan Semiconductor should continue to capture this attractive growth story.
story continues
