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4 Top-Ranked Chip Stocks to Buy for Better Returns in October
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Key Takeaways
Analog Devices is benefiting from stronger industrial demand and expanding AI data center activity.
Semtech gains from rising AI networking demand as 800G stays active and 1.6T ramps broaden content.
Taiwan Semiconductor grew 29% in Q2 2026, supported by robust AI demand and leading-edge technologies.
The artificial intelligence (AI) boom has led leading AI companies, hyperscalers, AI fabs and sovereign spending to ramp up AI infrastructure, benefiting semiconductor companies. Companies serving the compute, scale-out networking, storage, scale-up interconnect, custom AI application-specific integrated circuit chips, optical communication and power delivery chips for these AI players are benefiting from a growing order book.
As the AI ecosystem strengthens, graphics processing units and AI accelerators remain the most obvious beneficiaries of the AI boom. Companies providing HBM and advanced packaging also remain among the most supply-constrained segments amid the massive demand. Other beneficiaries include the providers of retimers, Serializer/Deserializer, optical Digital Signal Processors and Transimpedance Amplifiers.
Similarly, networking and optical connectivity chips represent some of the most structurally expanding opportunities while power delivery semiconductors and signal-conditioning chips remain relatively overlooked. The global semiconductor market generated a record $403.3 billion in sales in the second quarter of 2026, rising 35.1% sequentially, while June sales climbed 123.6% year over year to $134.5 billion. With semiconductor demand accelerating sharply on the back of AI and advanced computing, this is an ideal time to hunt for the most potent and silent winner of the semiconductor arena for October.
Investors looking to benefit from the semiconductor companies benefiting from the AI boom in October 2026 should consider these stocks. Analog Devices (ADI - Free Report) , Semtech Corporation (SMTC - Free Report) , Taiwan Semiconductor Manufacturing Company (TSM - Free Report) and ASM International NV (ASMIY - Free Report) are five such semiconductor stocks that appear well-positioned to benefit from the ongoing AI boom. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), offering solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our Picks
Analog Devices is benefiting from a broad-based recovery as Industrial demand improves and AI-related data center activity expands across optical and power applications. Long-cycle exposure to automation, test, aerospace and defense, energy systems and vehicle electrification supports durable growth.
In the third quarter of fiscal 2026, ADI’s top line surged 40% year over year, while non-GAAP earnings per share (EPS) increased 68.3%. The Zacks Consensus Estimate for fiscal 2026 revenues and EPS suggests a year-over-year increase of approximately 37% and 66%, respectively. The consensus mark for fiscal 2026 earnings has been revised upward over the past 60 days.
Currently, Analog Devices carries a Zacks Rank #2 and has a Growth Score of B.
Semtech is benefiting from rising AI data center networking demand as 800G remains active and 1.6T FiberEdge and CopperEdge ramps broaden its content opportunity. LoRa is extending across industrial, smart-home and mass-market consumer applications, while premium-device protection and sensing add another growth avenue.
The Zacks Consensus Estimate for fiscal 2027 revenues and EPS suggests a year-over-year increase of approximately 41% and 104%, respectively. The consensus mark for fiscal 2027 earnings has been revised upward over the past 30 days. Currently, Semtech sports a Zacks Rank #1 and has a Growth Score of A.
Taiwan Semiconductor Manufacturing Company continued its strong growth in the second quarter of 2026, with revenues rising 29% year over year on robust AI demand. TSMC maintained its dominant 73% market share, supported by N2 and N3 production, advanced packaging and strong demand across leading-edge technologies, reinforcing its long-term growth outlook.
The Zacks Consensus Estimate for TSM’s 2026 revenues and EPS suggests a year-over-year increase of approximately 37% and 55%, respectively. The consensus mark for 2026 earnings has been revised upward in the past seven days. Currently, Taiwan Semiconductor carries a Zacks Rank #2 and has a Growth Score of B.
Taiwan Semiconductor Manufacturing Company Ltd. Price and Consensus
ASM International is well positioned for long-term growth, backed by a leading market share of more than 55% in ALD, expanding Epi opportunities, and rising demand from GAA, advanced DRAM and AI-driven leading-edge logic. Second-quarter revenues grew 24% year over year, while management expects second-half revenues to rise more than 20%, reinforcing its growth trajectory.
The Zacks Consensus Estimate for ASM International’s 2026 revenues and EPS suggests a year-over-year increase of approximately 34% and 65%, respectively. The consensus mark for 2026 earnings has remained unchanged in the past 30 days. Currently, ASM International carries a Zacks Rank #2 and has a Growth Score of B.
View the Zacks #1 Rank List
Image: Bigstock
4 Top-Ranked Chip Stocks to Buy for Better Returns in October
Key Takeaways
The artificial intelligence (AI) boom has led leading AI companies, hyperscalers, AI fabs and sovereign spending to ramp up AI infrastructure, benefiting semiconductor companies. Companies serving the compute, scale-out networking, storage, scale-up interconnect, custom AI application-specific integrated circuit chips, optical communication and power delivery chips for these AI players are benefiting from a growing order book.
As the AI ecosystem strengthens, graphics processing units and AI accelerators remain the most obvious beneficiaries of the AI boom. Companies providing HBM and advanced packaging also remain among the most supply-constrained segments amid the massive demand. Other beneficiaries include the providers of retimers, Serializer/Deserializer, optical Digital Signal Processors and Transimpedance Amplifiers.
Similarly, networking and optical connectivity chips represent some of the most structurally expanding opportunities while power delivery semiconductors and signal-conditioning chips remain relatively overlooked. The global semiconductor market generated a record $403.3 billion in sales in the second quarter of 2026, rising 35.1% sequentially, while June sales climbed 123.6% year over year to $134.5 billion. With semiconductor demand accelerating sharply on the back of AI and advanced computing, this is an ideal time to hunt for the most potent and silent winner of the semiconductor arena for October.
Investors looking to benefit from the semiconductor companies benefiting from the AI boom in October 2026 should consider these stocks. Analog Devices (ADI - Free Report) , Semtech Corporation (SMTC - Free Report) , Taiwan Semiconductor Manufacturing Company (TSM - Free Report) and ASM International NV (ASMIY - Free Report) are five such semiconductor stocks that appear well-positioned to benefit from the ongoing AI boom. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), offering solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our Picks
Analog Devices is benefiting from a broad-based recovery as Industrial demand improves and AI-related data center activity expands across optical and power applications. Long-cycle exposure to automation, test, aerospace and defense, energy systems and vehicle electrification supports durable growth.
In the third quarter of fiscal 2026, ADI’s top line surged 40% year over year, while non-GAAP earnings per share (EPS) increased 68.3%. The Zacks Consensus Estimate for fiscal 2026 revenues and EPS suggests a year-over-year increase of approximately 37% and 66%, respectively. The consensus mark for fiscal 2026 earnings has been revised upward over the past 60 days.
Currently, Analog Devices carries a Zacks Rank #2 and has a Growth Score of B.
Analog Devices, Inc. Price and Consensus
Analog Devices, Inc. price-consensus-chart | Analog Devices, Inc. Quote
Semtech is benefiting from rising AI data center networking demand as 800G remains active and 1.6T FiberEdge and CopperEdge ramps broaden its content opportunity. LoRa is extending across industrial, smart-home and mass-market consumer applications, while premium-device protection and sensing add another growth avenue.
The Zacks Consensus Estimate for fiscal 2027 revenues and EPS suggests a year-over-year increase of approximately 41% and 104%, respectively. The consensus mark for fiscal 2027 earnings has been revised upward over the past 30 days. Currently, Semtech sports a Zacks Rank #1 and has a Growth Score of A.
Semtech Corporation Price and Consensus
Semtech Corporation price-consensus-chart | Semtech Corporation Quote
Taiwan Semiconductor Manufacturing Company continued its strong growth in the second quarter of 2026, with revenues rising 29% year over year on robust AI demand. TSMC maintained its dominant 73% market share, supported by N2 and N3 production, advanced packaging and strong demand across leading-edge technologies, reinforcing its long-term growth outlook.
The Zacks Consensus Estimate for TSM’s 2026 revenues and EPS suggests a year-over-year increase of approximately 37% and 55%, respectively. The consensus mark for 2026 earnings has been revised upward in the past seven days. Currently, Taiwan Semiconductor carries a Zacks Rank #2 and has a Growth Score of B.
Taiwan Semiconductor Manufacturing Company Ltd. Price and Consensus
Taiwan Semiconductor Manufacturing Company Ltd. price-consensus-chart | Taiwan Semiconductor Manufacturing Company Ltd. Quote
ASM International is well positioned for long-term growth, backed by a leading market share of more than 55% in ALD, expanding Epi opportunities, and rising demand from GAA, advanced DRAM and AI-driven leading-edge logic. Second-quarter revenues grew 24% year over year, while management expects second-half revenues to rise more than 20%, reinforcing its growth trajectory.
The Zacks Consensus Estimate for ASM International’s 2026 revenues and EPS suggests a year-over-year increase of approximately 34% and 65%, respectively. The consensus mark for 2026 earnings has remained unchanged in the past 30 days. Currently, ASM International carries a Zacks Rank #2 and has a Growth Score of B.
ASM International NV Price and Consensus
ASM International NV price-consensus-chart | ASM International NV Quote