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Buy These 5 Semiconductor Stocks as Sales Skyrocket on Solid AI Demand
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Key Takeaways
Global chip sales rose 6.4% sequentially in July, extending growth to 17 straight months.
NVDA leads the group with a 93.3% expected current-year earnings growth rate.
ACMR's consensus earnings estimate jumped 49.6% over the past 60 days.
Semiconductor stocks have had an impressive year so far after a stellar 2025. Higher demand, driven by continued enthusiasm surrounding artificial intelligence (AI), has made chip stocks one of the most lucrative buys.
Although concerns grew a few months back about the potential of AI stocks given the massive investments being made by big tech companies, the fears have gradually eased after robust earnings from AI giants reinstalled investors’ confidence.
Given the upbeat sentiment, it would be ideal to invest in semiconductor stocks, such as Analog Devices (ADI - Free Report) , Taiwan Semiconductor Manufacturing Company Limited (TSM - Free Report) , Texas Instruments (TXN - Free Report) , NVIDIA Corporation (NVDA - Free Report) and ACM Research, Inc. (ACMR - Free Report) , which have great potential for growth this year.
Semiconductor Market Continues to Expand
Global semiconductor sales totaled $146.8 billion in July, up 6.4% sequentially from June’s total of $137.9 billion, the Semiconductor Industry Association (“SIA”) reported last week. Year over year, semiconductor sales surged 135.1% in July from last year’s total of $62.5 billion.
John Neuffer, SIA president and CEO, said, “The global semiconductor market grew on a month-to-month basis for the 17th consecutive month in July, and the industry has already reached its highest-ever annual global sales total just seven months into the year.”
Global semiconductor sales have now grown for 17 straight months. Chip sales have also grown in all seven months this year.
AI-related semiconductor stocks came under pressure a couple of months back, as concerns grew over the potential of AI and whether the rapid growth can be sustained. This saw investors rotating out of AI-related chip stocks and taking refuge in more defensive assets.
However, major AI-related semiconductor companies reported robust earnings and issued impressive forecasts last quarter, which have fizzled out the fears, sending chip stocks on a rally once again.
Semiconductor companies have played a major role in driving the broader market’s gains in recent years. The robust jump in July follows a stellar first and second quarter for chip stocks. Worldwide semiconductor sales totaled $403.3 billion in the second quarter of 2026 and $298.5 billion in the first quarter, surging 33.1% and 25% sequentially, respectively.
Semiconductors have become an essential part of almost every modern and emerging technology, powering developments in areas such as the Internet of Things (IoT), 6G connectivity and artificial intelligence.
Rising demand from the automotive industry has also helped drive chip sales higher. At the same time, the AI sector remains in the early stages of its growth, prompting major technology companies to invest billions of dollars in AI research, development and infrastructure.
With these companies continuing to ramp up spending on AI infrastructure, investor sentiment toward semiconductor stocks has remained strong.
5 Semiconductor Stocks With Upside
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 66.4%. The Zacks Consensus Estimate for current-year earnings has improved 5.2% over the past 60 days. ADI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Taiwan Semiconductor Manufacturing Company Limited
Taiwan Semiconductor Manufacturing Company Limited is the world's largest dedicated integrated circuit foundry. TSM manufactures ICs for its customers based on their proprietary IC designs using its advanced production processes. Taiwan Semiconductor Manufacturing Company Limited’s goal is to establish itself as one of the world's leading semiconductor companies by building upon the strengths that have made it the world's leading IC foundry.
Taiwan Semiconductor Manufacturing Company Limited’s expected earnings growth rate for the current year is 55.1%. The Zacks Consensus Estimate for current-year earnings has improved 7.6% over the past 60 days. TSM presently carries a Zacks Rank #1.
Texas Instruments
Texas Instruments is an original equipment manufacturer of analog, mixed-signal and digital signal-processing integrated circuits. TXN has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia and Europe. Management strategy has been to build assets that would be fully utilized through their lifetimes and outsource any excess demand in peak situations to outside foundries.
Texas Instruments’ expected earnings growth rate for the current year is 55.1%. The Zacks Consensus Estimate for current-year earnings has improved 10.3% over the past 60 days. Currently, TXN carries a Zacks Rank #2.
NVIDIA Corporation
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphics 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 93.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the last 60 days. NVDA currently has a Zacks Rank #1.
ACM Research
ACM Research, Inc. develops, manufactures and sells single-wafer wet cleaning equipment, which semiconductor manufacturers can use in numerous manufacturing steps to remove particles, contaminants and other random defects. ACMR is headquartered in Fremont, CA.
ACM Research’s expected earnings growth rate for the current year is 27.3%. The Zacks Consensus Estimate for current-year earnings has improved 49.6% over the past 60 days. ACMR sports a Zacks Rank #1 at present.
View the Zacks #1 Rank List
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Buy These 5 Semiconductor Stocks as Sales Skyrocket on Solid AI Demand
Key Takeaways
Semiconductor stocks have had an impressive year so far after a stellar 2025. Higher demand, driven by continued enthusiasm surrounding artificial intelligence (AI), has made chip stocks one of the most lucrative buys.
Although concerns grew a few months back about the potential of AI stocks given the massive investments being made by big tech companies, the fears have gradually eased after robust earnings from AI giants reinstalled investors’ confidence.
Given the upbeat sentiment, it would be ideal to invest in semiconductor stocks, such as Analog Devices (ADI - Free Report) , Taiwan Semiconductor Manufacturing Company Limited (TSM - Free Report) , Texas Instruments (TXN - Free Report) , NVIDIA Corporation (NVDA - Free Report) and ACM Research, Inc. (ACMR - Free Report) , which have great potential for growth this year.
Semiconductor Market Continues to Expand
Global semiconductor sales totaled $146.8 billion in July, up 6.4% sequentially from June’s total of $137.9 billion, the Semiconductor Industry Association (“SIA”) reported last week. Year over year, semiconductor sales surged 135.1% in July from last year’s total of $62.5 billion.
John Neuffer, SIA president and CEO, said, “The global semiconductor market grew on a month-to-month basis for the 17th consecutive month in July, and the industry has already reached its highest-ever annual global sales total just seven months into the year.”
Global semiconductor sales have now grown for 17 straight months. Chip sales have also grown in all seven months this year.
AI-related semiconductor stocks came under pressure a couple of months back, as concerns grew over the potential of AI and whether the rapid growth can be sustained. This saw investors rotating out of AI-related chip stocks and taking refuge in more defensive assets.
However, major AI-related semiconductor companies reported robust earnings and issued impressive forecasts last quarter, which have fizzled out the fears, sending chip stocks on a rally once again.
Semiconductor companies have played a major role in driving the broader market’s gains in recent years. The robust jump in July follows a stellar first and second quarter for chip stocks. Worldwide semiconductor sales totaled $403.3 billion in the second quarter of 2026 and $298.5 billion in the first quarter, surging 33.1% and 25% sequentially, respectively.
Semiconductors have become an essential part of almost every modern and emerging technology, powering developments in areas such as the Internet of Things (IoT), 6G connectivity and artificial intelligence.
Rising demand from the automotive industry has also helped drive chip sales higher. At the same time, the AI sector remains in the early stages of its growth, prompting major technology companies to invest billions of dollars in AI research, development and infrastructure.
With these companies continuing to ramp up spending on AI infrastructure, investor sentiment toward semiconductor stocks has remained strong.
5 Semiconductor Stocks With Upside
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 66.4%. The Zacks Consensus Estimate for current-year earnings has improved 5.2% over the past 60 days. ADI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Taiwan Semiconductor Manufacturing Company Limited
Taiwan Semiconductor Manufacturing Company Limited is the world's largest dedicated integrated circuit foundry. TSM manufactures ICs for its customers based on their proprietary IC designs using its advanced production processes. Taiwan Semiconductor Manufacturing Company Limited’s goal is to establish itself as one of the world's leading semiconductor companies by building upon the strengths that have made it the world's leading IC foundry.
Taiwan Semiconductor Manufacturing Company Limited’s expected earnings growth rate for the current year is 55.1%. The Zacks Consensus Estimate for current-year earnings has improved 7.6% over the past 60 days. TSM presently carries a Zacks Rank #1.
Texas Instruments
Texas Instruments is an original equipment manufacturer of analog, mixed-signal and digital signal-processing integrated circuits. TXN has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia and Europe. Management strategy has been to build assets that would be fully utilized through their lifetimes and outsource any excess demand in peak situations to outside foundries.
Texas Instruments’ expected earnings growth rate for the current year is 55.1%. The Zacks Consensus Estimate for current-year earnings has improved 10.3% over the past 60 days. Currently, TXN carries a Zacks Rank #2.
NVIDIA Corporation
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphics 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 93.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the last 60 days. NVDA currently has a Zacks Rank #1.
ACM Research
ACM Research, Inc. develops, manufactures and sells single-wafer wet cleaning equipment, which semiconductor manufacturers can use in numerous manufacturing steps to remove particles, contaminants and other random defects. ACMR is headquartered in Fremont, CA.
ACM Research’s expected earnings growth rate for the current year is 27.3%. The Zacks Consensus Estimate for current-year earnings has improved 49.6% over the past 60 days. ACMR sports a Zacks Rank #1 at present.