In 2025, the global semiconductor market is poised to expand, igniting enthusiasm among market participants. In particular, some semiconductor stocks – Nvidia Corporation (NVDA Quick QuoteNVDA – Free Report) and Taiwan Semiconductor Manufacturing Company Limited (TSM Quick QuoteTSM – (Free Report), or TSMC – Advanced Micro Devices, Inc., which has seen considerable profits for quite some time. (AMD Quick QuoteAMD – Free Report) is having a terrible run. So, let’s take a look at how investors should bet on these three companies.
Semiconductors – Growth market in 2025
Increasing demand for Internet of Things (IoT) devices, digitalization of the economy, and heavy investment in semiconductor manufacturing hubs are expected to help expand the semiconductor market over this year.
According to Statista, revenue from the worldwide semiconductor market is estimated to reach $70.240 billion in 2025, up from $60.741 billion last year. Revenue is projected to reach $980.8 billion by 2029 at a CAGR of 8.70%. Integrated circuits market drives revenue followed by discrete semiconductors, optoelectronics, and sensors and actuators.
Ishares Semiconductor ETF (with Soxx Quick Quotes) Semiconductor stocks are already starting to gain momentum this year.soxx – Free Report) Gained 9.2% for the year after advancing 12.2% last year.
Two semiconductor stocks to invest in: Nvidia & TSMC
Soxx’s top holdings, Nvidia and TSMC, have performed well and are poised for further growth in the semiconductor market. Strong demand for Nvidia’s new and old chips is expected to drive the stock higher.
Shipments of a new generation of cutting-edge Blackwell chips have surged this quarter due to improved energy efficiency and 30x more AI interfaces than older chips. At the same time, CEO Jensen Huang confirmed that the demand for older hopper chips is stable due to their superior quality compared to rival Intel Corporation (INTC Quick QuoteINTC – free report).
Nvidia’s leading global market share in the graphics processing unit (GPU) space provides a competitive advantage. This is as the global GPU market is estimated to increase from $75.77 billion in 2025 to $101.54 billion in 2025.
With Nvidia stock poised to climb, it would be wise to consider buying NVDA stock. NVIDIA currently has a Zacks Rank #2 (Buy), and NVDA’s Zacks Consensus Estimate of $2.94 earnings per share (EPS) has increased 46.3% from a year ago (Read More: Potential 2025 Purchase Gain: NVIDIA & PALANTIR).
Image source: Zacks Investment Research
Meanwhile, TSMC’s dominance in the global foundry market is expected to boost the stock’s performance. Increased demand for TSMC’s custom artificial intelligence (AI) chips from Broadcom Inc. and others (AVGO Quick Quoteavgo – Free report) strengthened future growth. Increased pre-order demand for TSMC’s highly anticipated 2-nanometer (NM) chips this year is also expected to boost TSMC stock. That demand exceeds the demand for existing 3nm and 5nm chips.
Certainly a must as TSMC stock is likely to rise. TSMC currently has a Zacks Rank #2 and its EPS is estimated to grow 21% over the last year. The Zacks Consensus Estimate is $9.12 (Read More: 3 Reasons to Buy TSMC Stock Beyond Record Net Income).
Image source: Zacks Investment Research
I’m avoiding semiconductor stock AMD for now
Unlike NVIDIA and TSMC, it’s best to avoid investing in Advanced Micro Devices, another key SOXX hold, for now. That’s because AMD stock has performed below par over the past five years due to a weakening personal computer market exacerbated by the pandemic. The chipmaker’s inability to capitalize on the AI bandwagon like Nvidia and slow demand for gaming consoles have failed to lift AMD stock.
AMD’s large amount of revenue from outside the United States exposes the company to exchange rate fluctuations. This is a headwind to its near-term outlook. AMD currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 (Strong Buy) Ranked stocks here.
