The semiconductor industry is an integral part of several other industries in the country. With a boost from artificial intelligence (AI), the semiconductor industry is growing at a rapid pace. It has immense potential across different markets and chip-making companies are cashing in on the rising demand. These companies cater to multiple industries and look promising for long-term growth. Industries including automotive, AI, machine learning, data centers, and robotics will continue to drive the demand for semiconductor stocks.
These companies will get a boost as the tech earnings season begins and positive results will take other tech stocks higher. With that in mind, here are three top semiconductor stocks to boost your investment portfolio.
Nvidia (NVDA)
A big name in the tech industry today, Nvidia (NASDAQ:NVDA) is leading the AI race. The company gained prominence with its graphics processing units and its processors have now become an integral part of data centers and cloud computing businesses. The stock soared to new highs after the company announced first quarter results and it is trading at $446 today. It is also up 211% year to date, which is nothing but impressive. Nvidia is still one of the best stocks in the semiconductor industry.
Tesla (NASDAQ:TSLA) recently stated that it is planning to build an AI-focused supercomputer and it intends to equip it with Nvidia’s GPUs. This means that Tesla could place an order for 300,000 Nvidia A100 GPUs by October next year, and it will have an impact on the top and bottom line of Nvidia. Many think that the stock is overvalued, but I believe in the potential of the company. So much so that I recommended a buy when it was trading in the range of $288. If you’d bought the stock then, you’d be sitting on massive gains today. If you are going to make a single semiconductor stock investment, choose Nvidia.
The first quarter results were driven by AI growth and the company reported an EPS of 82 cents, which is a 28% surge. It expects a revenue of $11 billion in the second quarter and if it achieves the same, this will be an all-time high for the company. While there are several top semiconductor stocks in the industry, Nvidia is the gold standard. NVDA stock is one of the best semiconductor stocks to own and hold for the long-term.
Advanced Micro Devices (AMD)
Tesla’s biggest competitor, Advanced Micro Devices (NASDAQ:AMD) has also benefitted from the AI investments. The company is growing its presence across the industry and is set to make the most of the AI hype. It released the generative AI chip called MI300X, which is known as the most advanced accelerator for generative AI. One big announcement from the company is that AMD will power the Azure virtual machines for Microsoft (NASDAQ:MSFT). Advanced Micro Devices has been known for its outstanding performance in the gaming segment and I believe that AI integration will help the company improve the user’s gaming experience. Its chips are already used to power the latest version of Sony’s (NYSE:SONY) PlayStation and Microsoft’s Xbox.
Despite seeing a drop in the first quarter revenue by 9%, AMD is set to grow in the coming months. We must not forget the huge impact of Xilinx (NASDAQ:XLNX) acquisition on the business and the enthusiasm surrounding AI which will help the stock price climb. With a recovery in the gaming and data center, we will see the stock move higher.
As the demand for chips continues to grow higher in the second half of the year, there is massive potential for AMD. Its global server market share has already exceeded 25%. While it may rank second in the market, after Nvidia, it still is worth investing in. AMD stock is trading at $110 today and is up 72% year-to-date. The company is set to announce results on August 1, and I believe the stock is a buy before that. It is one of the top-performing semiconductor stocks in the market today.
Intel (INTC)
Smart investors should not leave out Intel (NASDAQ:INTC) from the semiconductor chips race. While it is much behind Nvidia and AMD, it is still moving strong. The company is building out a foundry business of its own and will bring five new manufacturing nodes to increase production in the next four years. This is a well-timed move and will convince the chip designers to use its foundry for efficiency and fast chips that power devices. Intel is focusing on becoming one of the largest semiconductor businesses in the industry. While it may take time, it could result in significant stock gains. INTC stock is exchanging hands at $33 today and is up 25% year-to-date.
Intel has a new chip for the quantum research community and is also making waves in the AI sector. The company’s Gaudi 2 chips are cheaper than Nvidia’s, however they are not as fast. Given the strong demand for chips in the industry, Intel will be able to attract companies who do not want to wait for weeks for Nvidia’s chips. The past few months haven’t been very positive for the stock and the company reported a net loss after several quarters of positive income. Investors weren’t thrilled with this, and as a result, it left an impact. With several positive catalysts to look forward to, things may change for the company. Intel is one of the essential top semiconductor stocks to own.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
