The artificial intelligence revolution has brought plenty of attention to specific tech stocks servicing the ultra-high expected growth the AI sector should provide for a long time to come. With many touting the AI revolution as the next great economic shift, there’s no doubt that certain chip stocks are going to benefit more than others from these trends.
This list of the top chip stocks to buy this year center around this pivotal catalyst. Accordingly, some may already have a pretty good idea of the sorts of stocks that will be included on this list.
The overall semiconductor sector is poised to continue growing at breakneck speed in 2025 and for years to come. For investors looking to capitalize on these trends, here are the three chip stocks I’m watching most closely right now.
Key Points About This Article:
- Investors are increasingly looking for top chip stocks to buy to play various secular growth trends, such as AI.
- Here are three of the top options in my book, with specific AI-related tailwinds right now.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is perhaps the most obvious pick to include on this list.
The leading high-performance chip maker dominates the GPU manufacturing space and the AI compute market, fueling some rather incredible growth over the past few years. This growth is widely expected to continue into 2025, with the company planning to scale production of its advanced Blackwell architecture to meet rising AI-driven data center demands. Despite slower growth than prior years, analysts project 51% revenue growth for fiscal 2026, making Nvidia’s valuation attractive for long-term investment.
The AI chip company leveraged its CUDA software and AI developer tools to build a strong competitive moat. Its GPUs, critical for AI model development, are in high demand, with Microsoft as a major customer. With increased AI data center spending projected for 2025, Nvidia is positioned for further growth. Trading at a forward price-earnings multiple of 31 and a PEG ratio of less than 1, there’s an argument to be made that Nvidia is relatively cheap. That’s incredible, given the fact that this is still a stock that’s trading at roughly 30-times sales.
Major tech companies are heavily investing in AI infrastructure, channeling significant funds to Nvidia, the industry leader in GPUs and CUDA software. With AI hyperscalers increasing spending in 2025, Nvidia is poised for profit, as analysts project 52% revenue growth for fiscal 2026. The company’s next-gen Blackwell chips, reportedly four times faster than Hopper for AI training, are expected to drive strong demand from top tech players.
Taiwan Semiconductor (TSM)
Nvidia’s GPUs rely on chips fabricated by Taiwan Semiconductor (NYSE:TSM), which also produces chips for other competitors. This positions Taiwan Semi as a neutral, key player in the AI boom. In 2024, AI-driven revenue for TSMC tripled, representing a mid-teens percentage of total sales. With its upcoming 2-nanometer chips offering superior efficiency, there’s a lot to like about this particular chip stock.
That goes double for investors who consider that TSM stock currently trades hands at just 23-times forward earnings. That’s below the S&P 500 average, and at a level I’d suggest represents value. Taiwan Semi expects 2024 revenue growth of nearly 30% and AI server chip sales to triple, boosting margins and profitability. With a strong global expansion plan and projected 31% annual earnings growth, its valuation suggests potential for substantial long-term returns.
Taiwan Semiconductor posted 39% year-over-year revenue growth in Q3, with Q4 revenue indicating similar strength. Wall Street projects 26% growth in 2025, supported by robust business performance. As a leader in its sector, the company appears well-positioned for significant upside in 2025.
Personally, I’ll be eyeing some potential drawdowns over the course of this year as buying opportunities to build a position.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) reported strong fiscal Q4 2024 results with $10.24 billion in revenue, up 18%, and net income rising 33% to $3.5 billion. The company holds a 31% share in the smartphone application processor market, and is set to benefit from the generative AI smartphone market projected to grow 78% annually through 2028. Over the past year, its stock gained nearly 12%.
Qualcomm, facing setbacks like losing a key Chinese client and Apple’s move to in-house chipsets, pivoted to diversify into IoT, automotive, and PC chips, with a focus on AI through its Snapdragon 8 Gen 3 chipset. This shift helped fiscal 2024 revenue grow 9% year-over-year to $39 billion, signaling recovery after a 5G upgrade cycle slowdown in 2023.
Moreover, Qualcomm’s automotive segment, contributing 9% of fiscal 2024 revenue, grew 55% year-over-year, signaling strong transformation potential. Despite analysts projecting flat 9% growth for fiscal 2025 and the stock trading 30% below last June’s highs, its price-earnings ratio of 18-times suggests this stock may be oversold. AI advancements and diversified product offerings could reignite growth and boost investor returns.
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