At the heart of the brave new world of artificial intelligence (AI) lies the top AI chip stocks, key players in the electrifying race toward AI’s full potential. These powerful chip-makers, known for their superior data processing capabilities, are powering AI’s quantum leaps forward at blistering speeds. This is fueling a global surge in AI stock values.
Furthermore, the AI chip market could potentially skyrocket to $42.4 billion by 2025, as per Grand View Research, marking a sturdy 11.3% cumulative growth rate from 2020 to 2025. This compelling growth trajectory underscores the sector’s potential to effectively generate massive returns. As a result, investors are seeking out the top AI stocks to add to their portfolio.
Investors worldwide are capitalizing on AI’s increasing integration into business operations, which offers improved customer experiences and robust revenue growth. Whether you’re a novice or a veteran investor on the hunt for millionaire-maker AI chip stocks to buy, the evolving landscape presents a wealth of opportunities as AI continues to shape the future.
Top AI Chip Stocks: ASML Holdings (ASML)
Within the chip industry’s echelon, Dutch powerhouse ASML Holdings (NASDAQ:ASML) is sprinting ahead. Thus far, it is proving to be both unmatched and unrivaled. It’s the only player in its niche capable of printing advanced microchips, a testament to its technological prowess. With robust security measures, ASML continues to build its competitive advantage and hold the crown as Europe’s tech darling.
The financial year was a crescendo of triumphs for the company, leaving Wall Street prognoses trailing in the dust. Furthermore, the semiconductor giant posted a massive 27% year-over-year growth in the second quarter, and its sales blew past expectations at €6.9 billion ($7.69 billion).
The firm is in pole position to capitalize on the surge of AI and machine learning, with Jefferies forecasting a bountiful influx from heightened GPU, CPU and connectivity chip volumes. With its powerful Extreme Ultraviolet lithography machines, ASML is critical to producing TSMC’s advanced 5-nanometer (nm) and 3nm components.
Marvell Technology (MRVL)
Marvell Technology (NASDAQ:MRVL) is a proven dynamo of the semiconductor world that continues to exceed expectations, with solid first-quarter results and an optimistic outlook that eclipses the street’s conjectures. Boasting an adjusted earnings-per-share of 31 cents against a 29-cent forecast and revenue nudging the $1.32 billion mark, Marvell surpasses expectations with considerable aplomb.
The company’s confidence is buoyed by the anticipated AI wave, potentially invigorating its business operations. Moreover, its management predicts a doubling of AI sales, a massive boost in light of their chipset’s role in powering popular AI chatbots such as ChatGPT. As these predictions made waves, Marvell’s share price leaped forward by a massive 15%.
Despite this, Marvell often finds itself on the fringes of AI chipmaker headlines. Yet, as we’ve seen in 2023, other chip stocks have rocketed past their valuations. Time will tell if Marvell, with its robust results and promising outlook, will command the attention it deserves.
Teradyne (TER)
In the semiconductor sphere, Boston’s own Teradyne (NASDAQ:TER) is making major strides. Its specialty, chip testing, is a critical task, particularly as chips begin to stack up vertically. The impending transition to 3nm chips amplifies the need for this rigorous work, painting a bright future ahead for Teradyne.
Already doubly as profitable as chip giant Nvidia, based on return on invested capital (ROIC), Teradyne is set to ride the wave of AI-driven demand. As AI propels the need for more intricate chips, Teradyne’s testing equipment becomes a more critical part of the semiconductor ecosystem. Additionally, the lion’s share of Teradyne’s revenue is generated from testing. With the complexity of semiconductor production, it’s evident that this segment will continue to grow rapidly.
Moreover, the company has expanded into industrial automation in recent years, diversifying its portfolio. Their 2017 acquisition, Universal Robots, played a key role in achieving 2022 sales of $404 million in their automation group, a 7.5% increase from 2021. Hence, these developments underscore Teradyne’s commitment to harnessing AI and automation.
On the date of publication, Muslim Farooque did not have (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
