We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AI Optimism Powers Semiconductor Sales: 5 Stocks to Buy Now
Read MoreHide Full Article
Key Takeaways
Global semiconductor sales hit $208.4B in Q3, up 15.8% sequentially on AI-fueled demand.
AI investments from Amazon and Microsoft are propelling demand for NVIDIA chips.
Stocks like SLAB, ADI, ASML and AEIS show rising earnings estimates and solid growth potential.
Demand for semiconductors has been on the rise for a while now, fueling higher sales and revenues for chipmakers. The enthusiasm surrounding artificial intelligence (AI), especially generative AI, has been pushing sales up over the past couple of years, which has also been boosting the broader market.
The semiconductor industry is poised to grow in the coming months, given the surge in sales seen in the past three quarters. Also, several deals signed by AI-focused companies over the past month affirm investors’ faith in semiconductor stocks that have been powering the AI revolution.
Global semiconductor sales totaled $208.4 billion in the third quarter, surging 15.8% sequentially, the Semiconductor Industry Association (SIA) said last week. For the month of September, semiconductor sales totaled $69.5 billion, jumping 7% sequentially and 25.1% from year-ago levels of $$55.5 billion.
According to SIA, the solid growth in the third quarter of 2025 was primarily driven by robust demand across a wide range of products, especially memory and logic. On a year-over-month basis, sales rose 8.2% in the Americas, 8% in Asia Pacific/All Other, and 6% in China in September.
The enthusiasm surrounding AI has been fueling demand for microchips. Big tech giants have been making huge investments in AI and have also been attributing their revenue growth to the robust AI business.
Massive Investment in AI Heping Semiconductor Stocks
Last week, Amazon.com, Inc. (AMZN - Free Report) announced a $38 billion deal with OpenAI, enabling the ChatGPT creator to scale its AI operations using Amazon Web Services’ cloud infrastructure. The deal will also involve the use of millions of NVIDIA Corporation’s GPU chips.
On the same day, Microsoft Corporation (MSFT - Free Report) partnered with data center company IREN Limited (IREN - Free Report) in a $9.7 billion deal, giving Microsoft access to Nvidia’s GB300 GPUs. Also, NVIDIA announced at its GTC conference that it plans to build AI supercomputers for the U.S. energy sector.
Semiconductor sales have grown at a rapid pace this year, totaling $179.7 billion in the second quarter, a 7.8% rise from the first quarter. This follows a strong 2024, during which chip sales totaled $627.6 billion, marking a 19.1% increase from $526.8 billion in 2023.
With AI investments accelerating, analysts expect the semiconductor market to continue growing at a double-digit pace through 2025.
5 Semiconductor Stocks With Growth Potential
Silicon Laboratories
Silicon Laboratories Inc. is a leading provider of silicon, software and solutions for the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. SLAB solves the electronics industry's toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity.
Silicon Laboratories’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 28.6% over the past 60 days. SLAB currently has a Zacks Rank #2.
Analog Devices
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed-signal and digital signal processing (“DSP”) integrated circuits. ADI’s product line comprises amplifiers and comparators; analog to digital converters; digital to analog converters; video encoders and decoders; embedded processing products and DSPs; MEMS and temperature sensors; RF/IF components and converters; power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors. Analog Devices also offers analog, digital and RF switches and multiplexers; analog microcontrollers; clock and timing products.
Analog Devices’ expected earnings growth rate for the current year is 21.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 60 days. ADI carries a Zacks Rank #2.
NVIDIA Corporation
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of 49.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 60 days. NVDA presently has a Zacks Rank #2.
ASML Holding N.V.
ASML Holding N.V. is a world leader in the manufacture of advanced technology systems for the semiconductor industry. ASML offers an integrated portfolio for manufacturing complex integrated circuits. ASML Holdingdesigns, develops, integrates, markets and services advanced systems used by customers, which are the major global semiconductor manufacturers, to create chips that power a wide array of electronic, communications and information technology products.
ASML Holding’s expected earnings growth rate for the current year is 39.7%. The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the past 60 days. ASML currently carries a Zacks Rank #2.
Advanced Energy Industries, Inc.
Advanced Energy Industries, Inc. is one of the leading suppliers of power subsystems and process-control technologies to the semiconductor industry. AEIS now focuses primarily on power-conversion solutions, including direct current, pulsed DC, low-frequency, high-voltage, and radio frequency power supplies, as well as matching networks and remote plasma sources for reactive gas applications and RF instrumentation to leverage the semiconductor, flat panel display, and industrial markets.
Advanced Energy Industries’ expected earnings growth rate for the current year is 56.1%. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the past 60 days. AEIS currently carries a Zacks Rank #2.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
AI Optimism Powers Semiconductor Sales: 5 Stocks to Buy Now
Key Takeaways
Demand for semiconductors has been on the rise for a while now, fueling higher sales and revenues for chipmakers. The enthusiasm surrounding artificial intelligence (AI), especially generative AI, has been pushing sales up over the past couple of years, which has also been boosting the broader market.
The semiconductor industry is poised to grow in the coming months, given the surge in sales seen in the past three quarters. Also, several deals signed by AI-focused companies over the past month affirm investors’ faith in semiconductor stocks that have been powering the AI revolution.
Given this scenario, it would be ideal to invest in semiconductor stocks, such as Silicon Laboratories Inc. (SLAB - Free Report) , Analog Devices (ADI - Free Report) , NVIDIA Corporation (NVDA - Free Report) , ASML Holding N.V. (ASML - Free Report) and Advanced Energy Industries, Inc. (AEIS - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Semiconductor Sales on a Rally
Global semiconductor sales totaled $208.4 billion in the third quarter, surging 15.8% sequentially, the Semiconductor Industry Association (SIA) said last week. For the month of September, semiconductor sales totaled $69.5 billion, jumping 7% sequentially and 25.1% from year-ago levels of $$55.5 billion.
According to SIA, the solid growth in the third quarter of 2025 was primarily driven by robust demand across a wide range of products, especially memory and logic. On a year-over-month basis, sales rose 8.2% in the Americas, 8% in Asia Pacific/All Other, and 6% in China in September.
The enthusiasm surrounding AI has been fueling demand for microchips. Big tech giants have been making huge investments in AI and have also been attributing their revenue growth to the robust AI business.
Massive Investment in AI Heping Semiconductor Stocks
Last week, Amazon.com, Inc. (AMZN - Free Report) announced a $38 billion deal with OpenAI, enabling the ChatGPT creator to scale its AI operations using Amazon Web Services’ cloud infrastructure. The deal will also involve the use of millions of NVIDIA Corporation’s GPU chips.
On the same day, Microsoft Corporation (MSFT - Free Report) partnered with data center company IREN Limited (IREN - Free Report) in a $9.7 billion deal, giving Microsoft access to Nvidia’s GB300 GPUs. Also, NVIDIA announced at its GTC conference that it plans to build AI supercomputers for the U.S. energy sector.
Semiconductor sales have grown at a rapid pace this year, totaling $179.7 billion in the second quarter, a 7.8% rise from the first quarter. This follows a strong 2024, during which chip sales totaled $627.6 billion, marking a 19.1% increase from $526.8 billion in 2023.
With AI investments accelerating, analysts expect the semiconductor market to continue growing at a double-digit pace through 2025.
5 Semiconductor Stocks With Growth Potential
Silicon Laboratories
Silicon Laboratories Inc. is a leading provider of silicon, software and solutions for the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. SLAB solves the electronics industry's toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity.
Silicon Laboratories’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 28.6% over the past 60 days. SLAB currently has a Zacks Rank #2.
Analog Devices
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed-signal and digital signal processing (“DSP”) integrated circuits. ADI’s product line comprises amplifiers and comparators; analog to digital converters; digital to analog converters; video encoders and decoders; embedded processing products and DSPs; MEMS and temperature sensors; RF/IF components and converters; power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors. Analog Devices also offers analog, digital and RF switches and multiplexers; analog microcontrollers; clock and timing products.
Analog Devices’ expected earnings growth rate for the current year is 21.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 60 days. ADI carries a Zacks Rank #2.
NVIDIA Corporation
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of 49.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 60 days. NVDA presently has a Zacks Rank #2.
ASML Holding N.V.
ASML Holding N.V. is a world leader in the manufacture of advanced technology systems for the semiconductor industry. ASML offers an integrated portfolio for manufacturing complex integrated circuits. ASML Holdingdesigns, develops, integrates, markets and services advanced systems used by customers, which are the major global semiconductor manufacturers, to create chips that power a wide array of electronic, communications and information technology products.
ASML Holding’s expected earnings growth rate for the current year is 39.7%. The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the past 60 days. ASML currently carries a Zacks Rank #2.
Advanced Energy Industries, Inc.
Advanced Energy Industries, Inc. is one of the leading suppliers of power subsystems and process-control technologies to the semiconductor industry. AEIS now focuses primarily on power-conversion solutions, including direct current, pulsed DC, low-frequency, high-voltage, and radio frequency power supplies, as well as matching networks and remote plasma sources for reactive gas applications and RF instrumentation to leverage the semiconductor, flat panel display, and industrial markets.
Advanced Energy Industries’ expected earnings growth rate for the current year is 56.1%. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the past 60 days. AEIS currently carries a Zacks Rank #2.