Best Semiconductor Stocks in 2025
The semiconductor sector is booming, powering everything from artificial intelligence to smartphones. In fact, semiconductors are now the backbone of AI, 5G, self-driving cars, and cloud computing, with demand expected to soar in coming years.
Investors have taken notice: the Philadelphia Semiconductor Index has climbed ~600% in the past decade, far outpacing the broader market. With government support like the U.S. CHIPS Act bolstering domestic chip production and new technologies driving growth, many chip companies look poised for strong performance in 2025 and beyon
1. Nvidia (NVDA)
Nvidia is the trillion-dollar chip giant at the center of the AI boom, with a market cap of around $3.3 trillion as of early 2025. The company dominates the GPU market for both AI and gaming, with its H100 chips powering most major AI data centers.
Recently, Nvidia has seen explosive growth, with revenue more than doubling (up 125% year-over-year) thanks to surging demand for AI chips. A key reason for its dominance is the ecosystem moat—Nvidia’s CUDA software and vast developer community make its platform hard to leave.
What Nvidia Does
Nvidia is a fabless semiconductor company known for designing graphics processing units (GPUs). Originally built for gaming, these chips are now essential for AI, cloud computing, and high-performance tasks. While Nvidia designs the chips, manufacturing is outsourced to partners like TSMC.
Nvidia leads in both chip architecture and supporting software. Its GPUs—such as the A100 and H100—are now the backbone for training AI models. Beyond chips, Nvidia also offers system-on-chips for autonomous driving and networking, and its CUDA software platform has become an industry standard in machine learning.
Why It’s a Top Pick
Nvidia is truly at the center of the AI revolution. Its dominance in AI chips has fueled astonishing growth—NVDA stock soared over 25,000% in the past decade. In 2024, cloud giants’ demand for AI accelerators pushed Nvidia’s revenue up more than 100% year-over-year.
As companies race to integrate AI into their products, they need Nvidia’s high-end GPUs and AI systems. This has helped make Nvidia one of the world’s most valuable companies and the “pick-and-shovel” provider of the AI gold rush. Beyond AI, Nvidia’s chips power gaming PCs, data centers, and have even been used for cryptocurrency mining, offering multiple growth drivers.
Growth Outlook
Looking ahead to 2025, Nvidia’s prospects remain strong. The shift to generative AI and large language models is driving massive spending on AI infrastructure, a major tailwind for Nvidia’s data center sales. The company is also moving into new areas like the Grace CPU and Hopper GPU combo chips, as well as platforms for robotics and automotive AI.
While rivals like AMD are stepping up their AI GPU efforts, Nvidia’s first-mover advantage and robust software ecosystem give it a strong moat. Investors should keep in mind that after its huge run-up, Nvidia’s valuation is high, which could lead to volatility. Still, for long-term believers in AI, Nvidia remains a cornerstone play with outstanding exposure to the sector’s growth.
2. Advanced Micro Devices (AMD)
AMD is a high-performance chip leader, challenging Intel in CPUs and Nvidia in GPUs. Its portfolio is diversified, with PC and server processors (Ryzen, EPYC), graphics cards (Radeon), and adaptive chips from the Xilinx acquisition.
The company is expanding into AI, investing heavily in AI accelerators and data center GPUs. AMD has enjoyed strong growth, gaining market share in server CPUs, which has significantly boosted its revenue and stock value—delivering an impressive five-year return of about 650%.
What They Do
AMD designs and sells microprocessors and graphics chips that power PCs, laptops, game consoles, and servers. The company is Intel’s main competitor in CPUs and also goes head-to-head with Nvidia in graphics chips.
Under CEO Lisa Su, AMD has staged a remarkable turnaround. Ryzen CPUs and EPYC server chips now offer top-tier performance, helping AMD take market share from Intel in both consumer and data center segments. AMD is a fabless company, outsourcing manufacturing to TSMC and focusing on chip design. The 2022 acquisition of Xilinx added FPGAs and adaptive computing products to its lineup, targeting industries like 5G, aerospace, and AI.
Why AMD Stands Out
AMD offers a diversified semiconductor business with exposure to several growth markets. Its EPYC server processors are popular with cloud providers and enterprises due to their strong price/performance edge over Intel. This segment is high-margin and a key profit driver.
On the graphics side, Radeon GPUs are well-regarded in gaming and are increasingly used in AI and high-performance computing. AMD is launching new AI accelerators (MI300 chips) to compete in the AI training market, which Nvidia currently dominates. The Xilinx deal also gives AMD a presence in adaptive chips and embedded systems, expanding into automotive, industrial, and telecom markets.
Analysts expect AMD’s focus on AI and high-performance computing to boost its growth into 2025, building on an already strong trajectory.
Growth Outlook
The outlook for AMD is optimistic. After a slower 2023 driven by a PC market slump, AMD is set to rebound as PC demand stabilizes and data center plus AI-related sales ramp up in 2024 and 2025.
New Genoa and Bergamo EPYC chips, built on advanced 5nm process technology, are well-positioned for the next server upgrade cycle. If AMD’s MI-series AI accelerators and Xilinx adaptive chips gain traction in AI deployments, that would fuel even more growth.
Risks remain, including tough competition from Intel and Nvidia, as well as the cyclical nature of semiconductor demand. However, for beginner investors, AMD stands out as a compelling story—a resurgent underdog turned industry leader, with significant room to grow as the semiconductor landscape evolves.
3. Broadcom (AVGO)
Broadcom is a diversified chip supplier powering critical “behind-the-scenes” components for networking, connectivity, and storage. The company has a strong focus on data centers and cloud, providing custom AI networking chips and ASICs to tech giants like Amazon, Google, and Microsoft. Its steady revenue comes from long-term contracts with large customers, plus it offers a modest dividend (around 1.1% yield).
Recently, Broadcom surpassed a $1 trillion market cap, reflecting the market’s confidence in its role within AI and cloud infrastructure.
What They Do
Broadcom is a semiconductor conglomerate designing a wide range of chips used in communications and infrastructure. If Nvidia and AMD are the “brains” of computers, Broadcom provides much of the essential plumbing—network switches, broadband and Wi-Fi chips, storage controllers, and specialized ASICs for large cloud customers.
Their products are everywhere: data centers, telecom networks, and smartphones (Apple, for example, uses Broadcom chips for Wi-Fi/Bluetooth). Broadcom has expanded through major acquisitions, moving beyond chips into software with the planned VMware acquisition. Still, semiconductors remain the company’s core, driving most of its revenue.
Why Broadcom Stands Out
Unlike pure-play chip designers, Broadcom is a steady, diversified business with strong cash flows, while still benefiting from major tech trends. In 2025, the boom in AI and cloud computing directly boosts Broadcom, as its networking and connectivity chips link thousands of Nvidia GPUs in massive AI clusters.
Broadcom’s Tomahawk switch chips and custom silicon power the networks for the world’s largest data centers. Its broad lineup—covering 5G, Wi-Fi 7, storage, and more—means Broadcom profits from multiple end markets, from 5G rollouts to the surge in cloud storage.
Long-term supply deals with big customers help Broadcom maintain more stable revenue than many other chip firms, reducing the usual boom-bust cycle. Combined with a decent dividend, this makes Broadcom appealing to investors seeking semiconductor growth with a bit less volatility.
Growth Outlook
Broadcom’s growth is expected to be steady rather than explosive. The company recently posted about 45% year-over-year revenue growth, driven by acquisitions and cloud demand. Looking ahead, analysts expect continued (if more moderate) growth as its chips remain vital for data center expansions and network upgrades.
The VMware acquisition will make Broadcom a unique blend of chip and software business. However, the company’s reliance on enterprise and infrastructure means its performance is tied to corporate IT spending. If big tech firms or telecoms cut back, Broadcom could see slower growth.
Unlike Nvidia or AMD, Broadcom isn’t a major player in consumer markets like gaming. Still, it remains a solid pick for 2025 as a profitable, less volatile semiconductor giant riding the AI and 5G infrastructure wave.
4. Qualcomm (QCOM)
Qualcomm is a dominant force in smartphone chips and 5G modems, supplying its Snapdragon processors to many Android phone makers. The company is also innovating in edge AI, bringing artificial intelligence directly onto phones and IoT devices through on-device AI computing.
Beyond mobile, Qualcomm is expanding into the automotive sector with chips for connected cars and autonomous driving, notably through its Snapdragon Ride platform. The company has a market cap in the $150–200 billion range and offers a 2%+ dividend yield, combining tech growth with some income.
What They Do
Qualcomm is a fabless chip designer, best known for its Snapdragon system-on-chip processors and wireless modems that power the majority of Android smartphones. If you own an Android phone, there’s a high chance it runs on a Snapdragon chip. These chips integrate CPU, graphics, and 4G/5G connectivity into a single platform.
Qualcomm leads the market in 5G modem technology—so much so that even Apple relied on Qualcomm modems until it developed its own. The company’s technology also extends to tablets, AR/VR devices, and Internet of Things (IoT) gadgets.
Expanding Beyond Smartphones
Importantly, Qualcomm is making significant moves into the automotive world. It provides chips and software for in-car infotainment systems and advanced driver-assistance systems (ADAS). Modern cars increasingly rely on high-powered computing, and Qualcomm is partnering with major automakers through its Snapdragon Ride platform to tap into this trend.
Why It’s a Top Pick
Qualcomm remains a leader in mobile semiconductors and is adapting well to new growth areas like AI and automotive. As 5G continues to roll out globally, Qualcomm’s chips serve as essential “gatekeepers” for 5G connectivity, which means every new 5G device sold can potentially boost its revenue through royalties and chip sales.
The company recognizes the future is moving toward AI on the edge. Instead of relying solely on cloud computing, much of tomorrow’s AI will run locally on devices—phones, VR headsets, and vehicles. Qualcomm is ahead of the curve by building AI accelerators into its Snapdragon chips, enabling devices to perform advanced image recognition and language processing right on the device. This could become a major growth driver as on-device AI becomes the norm.
Growth Outlook
In the short term, Qualcomm does face some challenges. The global smartphone market has matured and is not growing as quickly as before, which has affected sales. Apple is also developing its own modems, which could eventually reduce Qualcomm’s income from one of its biggest customers. However, Apple’s transition has been delayed, and 5G adoption is still ramping up in large markets like India.
Qualcomm’s diversification into IoT and automotive is expected to help balance out any slowdown in smartphones. Analysts expect steady, though not explosive, growth through 2025. For new investors, Qualcomm is a key player in wireless technology with a solid history, offering exposure to both mobile and edge-AI trends while paying a reliable dividend.
5. ON Semiconductor (ON)
ON Semiconductor (now known as onsemi) is a mid-cap chipmaker focused on power, sensor, and connectivity chips for the automotive and industrial markets. It’s a key player in silicon carbide (SiC) power semiconductors, which are essential for improving the range and efficiency of electric vehicles.
Demand for Onsemi’s chips is strong, especially from electric car manufacturers. Even with broader economic uncertainties, the EV boom continues to drive sales. The company has shifted from lower-value products to higher-growth segments like electric vehicles and renewable energy, boosting its prospects.
What They Do
Onsemi makes a wide variety of power management and sensing chips. While these aren’t as visible as CPUs, they’re crucial for managing electricity and enabling electronics to sense their environment.
Their products include power transistors, diodes, image sensors, and battery management chips. Onsemi supplies many of these components to the automotive market, such as power modules for controlling electric motors and silicon carbide chips that make EV batteries last longer. The company also serves industrial clients in areas like factory automation and solar inverters.
Why It’s a Top Pick
In recent years, Onsemi has reinvented itself to capitalize on the megatrends of electric transportation and green energy. It’s one of the few companies that can produce advanced SiC power chips, which let EVs charge faster and travel farther. As EV sales rise worldwide, Onsemi’s automotive chip business has stayed strong, even when other markets have weakened.
Onsemi is also expanding into sensors for driver-assistance systems, including image sensors for car cameras and radar chips. This move complements its existing power solutions and positions it well for the future of autonomous and connected vehicles. By shifting focus away from commodity chips, Onsemi has improved both its growth outlook and profitability.
For investors, Onsemi offers direct exposure to the electrification movement—not just in EVs, but also in areas like 5G infrastructure and renewable energy equipment that require advanced power semiconductors.
Growth Outlook
Onsemi’s future is closely tied to the ongoing growth of the EV industry. Analysts expect continued revenue growth as the company wins more projects in both automotive and industrial sectors. Onsemi’s management has provided optimistic forecasts, highlighting robust EV chip orders.
Of course, there are risks. Competition in SiC chips is increasing, and the auto sector can be cyclical. The stock price may fluctuate if there are concerns about supply or demand. Still, with the global shift toward electrification, Onsemi stands out as a semiconductor company with a clear growth niche—making it an appealing pick for investors interested in the EV and green energy trend.
6. Lattice Semiconductor (LSCC)
Lattice Semiconductor is a small-cap chip designer specializing in low-power FPGA chips—field-programmable gate arrays. These chips are known for sipping power while handling flexible, programmable tasks. Lattice plays a key role in edge computing and AI, enabling smart features in cars, factories, and consumer gadgets.
Recently, Lattice has launched new FPGA platforms like Nexus and Avant, expanding its reach into higher-performance uses. These innovations are helping the company move beyond its traditional market and into new applications.
What Lattice Does
While not a household name, Lattice quietly makes the small programmable chips powering all kinds of electronics. FPGAs from Lattice can be reconfigured after manufacturing, making them extremely versatile. Unlike bigger competitors like Intel and AMD, Lattice focuses on the small, low-power end of the market.
You’ll find Lattice chips in industrial automation, automotive electronics, communications, and consumer devices—anywhere a compact, flexible chip is needed for tasks like interface control, sensor data processing, or accelerating AI on the edge.
Why Lattice Stands Out
Lattice proves that not all semiconductor winners are huge companies. As a ~$7 billion business, it’s found a lucrative niche. The growing need for on-device AI and processing—especially in environments with strict power or size limits—has been a major tailwind. Lattice’s Nexus and Avant chips have boosted performance, letting it compete in more demanding applications that previously required larger FPGAs.
The company has reported record design wins in AI, robotics, and automotive as of early 2025, and it has earned industry awards for its edge AI solutions. For investors, Lattice represents a growth story: it’s consistently grown sales, expanded margins, and delivered strong stock returns—even outpacing some larger chip firms. It’s a compelling way to play the AI and IoT boom at the device level.
Growth Outlook
As a small-cap, Lattice’s stock can be volatile, and it experienced a pullback in 2024 along with the broader chip sector. However, its business fundamentals remain solid, and analysts expect robust growth ahead. Lattice is aiming for high-teens percentage growth in new product revenue for 2025.
Expansion into mid-range FPGAs with Avant opens up a much larger market and could accelerate future growth. While Lattice does face competition from industry giants, its focus on low-power solutions gives it a unique edge.
In summary, Lattice Semiconductor is a smaller, aggressive growth pick in the semiconductor sector. It’s well-suited for investors looking to diversify beyond the big names and gain exposure to the edge AI and IoT device boom.
7. Rambus (RMBS)
Rambus is a small-cap tech company specializing in memory interface chips and security IP solutions. Its high-speed chips are crucial for AI and high-performance computing, enabling fast data transfer between processors and memory.
With rising demand from AI workloads, Rambus is well-positioned as these systems require massive memory bandwidth. The company also provides cryptography chips and silicon IP for securing data, which is increasingly important in today’s environment of growing cyber threats.
What Rambus Does
Unlike traditional chip manufacturers, Rambus focuses on chip IP and interface products. Historically known for memory technology innovations and patent licensing, Rambus now develops and sells high-speed interface chips that connect memory and processors.
These chips support technologies like DDR5 and high-bandwidth memory (HBM), allowing CPUs and AI accelerators to communicate efficiently. In addition, Rambus offers security IP and chips—encryption cores and secure key storage modules—used in cloud data centers and payment systems where protecting data is essential.
Why Rambus Stands Out
As AI, cloud, and gaming drive the need for faster memory, Rambus provides the technology that powers these high-speed systems. When you hear about cutting-edge AI chips with massive throughput, Rambus is often behind the memory interfaces that make it possible. In essence, Rambus acts as an “arms dealer” to AI chip makers, ensuring their accelerators can access data quickly and securely.
This demand has boosted Rambus’ performance, and the company is still relatively small—about a $5–6 billion market cap—which suggests potential upside for investors if Rambus continues to execute well in these high-growth areas.
The company’s security products are also timely. With more data in motion, encryption and secure boot at the hardware level are increasingly vital, and Rambus’ solutions help meet those needs.
Growth Outlook
Rambus’s outlook remains strong as long as AI and cloud computing trends continue. The rollout of DDR5 memory and growing use of HBM in advanced AI systems support a multi-year upgrade cycle, benefiting Rambus.
The company has shifted towards a product-based revenue model, selling more memory interface chips alongside its licensing business. This can lead to more stable income. A potential risk is that large players like Intel, AMD, or Nvidia could develop their own solutions, but Rambus’s expertise gives it a head start.
Financially, Rambus is healthy, with no debt and cash reserves—an advantage for a small cap. Overall, Rambus offers targeted exposure to two essential areas of semiconductors—memory speed and security—making it a compelling contender among 2025’s best semiconductor stocks.
