Because of the very high amount of expense needed to get into the semiconductor business, established companies tend to be able to ramp up profit margins as revenue increases over time. Generative AI, which includes technologies like machine learning and neural networks, is another significant growth driver for semiconductor companies. Emerging semiconductor companies focusing on IoT will need to innovate to create smaller, more efficient, and more powerful chips to meet the evolving needs of this market. Some traders use options to speculate on high-volume stocks such as semiconductor stocks. Traders might buy call options if they think a semiconductor stock might rise in price, or they might buy put options if they think it will fall in price. Intel (INTC), Micron (MU) and Texas Instruments (TXN) are all examples of IDMs.
Semiconductor stocks
Data-center sales surged 76% year-over-year and now make up nearly three-quarters of total revenue. On an annualized basis, that puts Marvell’s top line around $6.5 billion. Smartphone chip shipments rose about 12% year over year, while the IoT and automotive businesses jumped 27% and 59%, respectively.
Intel Corporation, founded in 1968, is a global leader in the technology sector. It focuses on manufacturing microprocessors and other semiconductor components. Its product line includes Core, Atom, Celeron, Pentium, and Xeon series processors, as well as graphics processors and chipsets. The company is pursuing technologies for data centers, the Internet of Things, and autonomous driving. Synopsys was founded in 1986 in Research Triangle Park, Raleigh, North Carolina, USA, by a group of engineers led by Aart de Geus, David Gregory, and Bill Krieger.
- 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.
- The reason is that EUV lithography is essential for producing chips with tiny 3-nanometer features and below – the kind needed to power high-performance processors and AI systems.
- Another option is to invest in semiconductors via semiconductor ETFs, which can give you exposure to dozens of semiconductor stocks in a single purchase, and often for much less than the cost of one NVIDIA share.
- Advanced Micro Devices is actively pursuing architecture development for autonomous systems and artificial intelligence.
- The company’s financial stability is supported by a low debt load, sufficient cash reserves, and positive operating cash flow.
- Of course, many stocks in the sector are still reeling from troubles during the past fiscal year, and IDC expects overall 2023 revenue for chipmakers to drop about 12% globally compared with 2022.
Semiconductor stock ETFs
Investing in semiconductors requires a willingness to handle these fluctuations. Get step-by-step guidance on investing in Microsoft stock and learn the ins and outs of this technology company. Semiconductors are arguably the most complex things ever developed by humankind. Manufacturing chips is very expensive, so it’s especially important to understand how semiconductor companies obtain the necessary financial resources to expand.
Best Semiconductor Stocks Of 2025
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These achievements have solidified its position in the market for high-performance computing and innovative technologies. In 2024, leading companies in the semiconductor sector have shown significant growth due to technology advancements and rising demand for chips. Many companies in this sector struggle to cope with the industry’s cyclical nature. Hardware, such as PC and laptop chips, tends to become a commodity as the years progress and more advanced types of forex trading charts & how to read forex charts chips come out. If a new market is growing quickly, other chipmakers might pile on with similar products. 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.
While it won’t capture all of this, it’s a huge growth opportunity that doesn’t even include newer customers, such as Apple. The company’s financial stability is supported by a low debt load, sufficient cash reserves, and positive operating cash flow. Assets represent the company’s resources, including cash, real estate, and more recently, cryptocurrencies.
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Marvell Technology (MRVL, $75.93) is quietly becoming a key player in the AI infrastructure arms race. Analysts at Melius Research expect the company’s AI-driven revenue to surge nearly 50% in 2026, surpassing $9 billion, a sign AMD’s layered approach – from the MI350 to the MI500 – could be a winning strategy. Meanwhile, partnerships like the new agreement with Saudi Arabia’s HUMAIN highlight the global appetite for AMD’s AI systems. These next-generation platforms will combine MI400 GPUs with Venice and Verano CPUs and Pensando Vulcano networking gear – part of a rack-scale architecture designed to compete with Nvidia.
- The company is developing new chip architectures and strengthening its leadership position within the industry.
- Overall, it was a strong quarter as it also put up an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
- To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
- Individual semiconductor stocks, as mentioned above, can provide market-beating returns.
- For cloud customers juggling scale and speed, Marvell’s one-stop-shop approach is proving attractive.
Several institutional investors have recently modified their holdings of the stock. Truvestments Capital LLC increased its holdings in shares of ON Semiconductor by 3.8% in the 4th quarter. Truvestments Capital LLC now owns 5,661 shares of the semiconductor company’s stock valued at $357,000 after acquiring an additional 207 shares during the period. Huntington National Bank increased its holdings in shares of ON Semiconductor by 8.9% in the 4th quarter. Huntington National Bank now owns 3,310 shares of the semiconductor company’s stock valued at $209,000 after acquiring an additional 271 shares during the period. Elequin Capital LP increased its holdings in shares of ON Semiconductor by 108.3% in the 4th quarter.
When we talk about the “finished electronic components” produced by the IDM and fabless-foundry models, we’re talking about computer parts, like processors and GPUs — not consumer products. There are, however, other fabrication equipment manufacturers that use non-EUV technologies. Below is a table of the seven best-performing stocks in the PHLX Semiconductor Index, ordered by one-year returns. For cloud customers juggling scale and speed, Marvell’s one-stop-shop approach is proving attractive. Its extensive IP in high-speed networking, accelerators and application-specific integrated circuits (ASICs) gives it a leg up in designing performance-optimized, energy-efficient solutions.
Companies with high profit margins usually have competitive advantages such as efficient cost management, innovative products and services, and strong market positions. When evaluating semiconductor stocks, it is essential to consider a variety of factors to make informed investment decisions. The following criteria will help to identify the strengths and weaknesses of the analyzed companies.