The U.S. semiconductor market has come roaring back in the past three months, rocking a 34% gain as measured by the PHLX Semiconductor Index (SOX) as of July 24. As recently as April 30, that sector’s benchmark index was down 16% year to date, signaling a remarkable pivot for what has become one of Wall Street’s most celebrated sectors.
What’s behind the bull rush for chip stocks?
To start, demand is outpacing emerging risks associated with the semiconductor sector. According to the Semiconductor Industry Association (SIA), global chip sales were $59 billion in May 2025, up 19.8% compared with the same period in 2024.
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“Global semiconductor sales remained strong in May, edging above the previous month’s total and remaining well ahead of sales from the same month last year,” says John Neuffer, SIA’s CEO. “Growth in the global chip market continued to be fueled by strong demand in the Americas and Asia Pacific.”
Semiconductor manufacturing is particularly robust, with original equipment manufacturers, or OEMs, expected to establish a new industry record of $125.5 billion in 2025, a 7.4% year-on-year increase, according to SEMI’s Mid-Year Total Semiconductor Equipment Forecast. Most of that growth is attributed to the significant demand from the artificial intelligence (AI) market.
“Following strong growth in 2024, global semiconductor manufacturing equipment sales are forecast to expand again this year and set a new record in 2026,” says Ajit Manocha, SEMI president and CEO. “While the semiconductor industry is closely monitoring?macroeconomic uncertainty, AI-fueled demand for chip innovations is driving investments in capacity expansions and leading-edge production.”
With the chip sector swinging freely in mid-2025, what sector stocks stand out right now? These seven names top that list:
| Semiconductor Stock | Implied Upside/Downside* | YTD Performance** |
|---|---|---|
| Nvidia Corp. (ticker: NVDA) | +5.5% | +27.2% |
| Advanced Micro Devices Inc. (AMD) | -10.2% | +31.3% |
| Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) | +11.3% | +22.4% |
| Qualcomm Inc. (QCOM) | +13.0% | +5.2% |
| Motorola Solutions Inc. (MSI) | +19.0% | -8.2% |
| ASML Holding NV (ASML) | +19.4% | +3.4% |
| Microchip Technology Inc. (MCHP) | +9.1% | +24.1% |
*Based on share price and TipRanks’ consensus price target as of July 24. **As of July 23 close.
Nvidia Corp. (NVDA)
Year-to-date performance: 27.2% Potential upside: 5.5%
Nvidia is once again in skyrocket mode, returning 66.3% over the past three months, and up over 27% year to date. That’s a far cry from the first quarter of 2025, when NVDA shares were down 18%.
Nvidia and other major semiconductor companies are buoyed by President Donald Trump’s new AI Action Plan, which aims to clear regulatory red tape and give U.S. chipmakers a green light to expand globally. In particular, the White House seeks to make it easier for companies like Nvidia to build the massive data centers needed for AI chips and access the energy resources required to power those facilities.
Nvidia also got a boost from Alphabet Inc. (GOOG, GOOGL), which is raising its capital expenditures from $52 billion in 2024 to $85 billion in 2025, with a big chunk of that cash going to data centers that rely on NVDA hardware.
Advanced Micro Devices Inc. (AMD)
YTD performance: 31.3% Potential downside: -10.2%
This Santa Clara, California-based chip company is also mounting a comeback in 2025, with AMD’s stock up 76% over the past three months, after being down 20% earlier in 2025.
The company is putting its chips on the AI table, with AMD CEO Lisa Su stating that AI chip demand could skyrocket to $500 billion within several years, in comments at a recent Hill & Valley Forum event. Su noted that sector growth relies on scaling “the entire ecosystem. The U.S. is going to be a huge piece of it.” She cited the White House’s AI Action Plan as a “really excellent blueprint” for industry growth.
With a formidable edge in the central processing unit and graphics computing market, AMD should rake in enough cash and buy some valuable time while the company looks to diversify into key profit centers like data centers, gaming and automotive markets (particularly the autonomous vehicle market).
One sticking point for AMD, along with other chipmakers, is the rising cost of production, with a 20% cost hike at the company’s Arizona semiconductor manufacturing facility compared to chips built in AMD’s Taiwan facilities.
Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)
YTD performance: 22.4% Potential upside: 11.3%
This Hsinchu, Taiwan-based semiconductor manufacturer recently reported Q2 revenues surged by 39% year over year and by 11% quarter over quarter. In turn, earnings per share rose 61% to a record $2.47. Company executives attribute the growth to increasing demand for its AI chips. Given that TSM handles an estimated 90% of the global high-performance chip manufacturing market, that’s good news for shareholders, who have to be excited over the chipmaker’s revised 2025 earnings forecast, which anticipates TSM revenues rising by 30% this year.
TSMC also has an A-grade partner list, with Apple Inc. (AAPL) and Nvidia among the companies that buy its chips.
Qualcomm Inc. (QCOM)
YTD performance: 5.2% Potential upside: 13%
San Diego-based Qualcomm’s shares are up 5.2% year to date, which is well below the SOX numbers and other key semiconductor benchmark indexes. The company is expected to release its latest quarterly results on July 30, and earnings per share are expected to rise 15% to $2.68, with revenues up 10.2% from the prior-year period.
The smartphone provider is also expanding into the AI realm and exploring new industries, such as autos and the Internet of Things, to diversify its revenue streams. In June, the company acquired Alphawave IP Group, a U.K.-based high-speed connectivity chipmaker, for $2.4 billion. “The combined teams share the goal of building advanced technology solutions and enabling next-level connected computing performance across a wide array of high-growth areas, including data center infrastructure,” Qualcomm CEO Cristiano Amon said in a statement.
On the downside, QCOM stock may be stymied by Apple pulling the plug on the company’s modems in favor of its own devices by 2026. Qualcomm has noted that 10% of its revenues came from its Apple partnership, and that cash won’t be easy to replace. “Our business, particularly our semiconductor business, may suffer as a result of our customers vertically integrating (i.e., developing their own integrated circuit products),” Qualcomm noted in a company report last November. That’s a big concern to any Qualcomm investor.
UBS analyst Timothy Arcuri is holding his “neutral” call on QCOM, with an adjusted price target of $165 per share, up from $145 per share. Analysts point to rising smartphone demand and QCOM’s diversification into other business sectors. The stock is trading around $158 per share as of July 24.
Motorola Solutions Inc. (MSI)
YTD performance: -8.2% Potential upside: 19%
This Chicago-based communications infrastructure and devices provider has seen its stock fall by over 8% so far in 2025, steepening an already deep share price slide. Yet the company continues to stack assets, having landed 30 acquisitions in the past decade with a total value of $7 billion. The company just made a $5 billion deal to buy Silvus Technologies, a specialist in high-capacity data, video and voice transmission, giving Motorola a clear path to lucrative markets such as defense and drone communications.
JPMorgan analyst Joseph Cardoso is a big backer of the stock and the Silvus deal, holding his “overweight” call on MSI with a projected share price of $515. The stock was trading around $424 per share on July 24.
ASML Holding NV (ASML)
YTD performance: 3.4% Potential upside: 19.4%
This Netherlands-based advanced semiconductor equipment systems company appears to be a pure-play bet on the chip sector at present, although its share price has declined 8.1% over the past month.
ASML is well positioned in the semiconductor market, excelling in the lithography machine space, which is crucial for the development of high-end chips. One clear-cut problem for ASML is the high cost of its extreme ultraviolet (EUV) lithography machines, which carry a price tag of $400 million per unit. Another downside is tariffs, with the Trump administration vacillating between 15% and 30% levies on European goods shipped to the U.S. That would add to the cost of shipping its products to otherwise strong American customers like Intel Corp. (INTC).
“When we have conversations with our customers, we do sense that they’re uncertain as to the tariff discussion, where it might land, and what the implications are for GDP growth and … what that means for the demand of their customers,” ASML Chief Financial Officer Roger Dassen noted in a recent earnings call.
Even so, ASML management stated that revenues are expected to grow by 15% in 2025, as the company solidifies its position as a top-tier player in the EUV machine market.
ASML also recently announced that it would buy back 10% of its stock, which is typically a sign of confidence from company decision-makers.
Microchip Technology Inc. (MCHP)
YTD performance: 24.1% Potential upside: 9.1%
This Chandler, Arizona-based semiconductor products company is in full rebound mode in mid-2025, with its share price up 68.6% over the past three months, following a 20% decline in the first quarter. Why is there a snapback in share-price value? MCHP’s rollout of its new 64-bit RISC-V processors with advanced AI capabilities is resonating with customers. Microchip has also expanded its Wi-Fi portfolio with 20 new products, and radiation-hardened chips have passed the strictest space industry certification tests, opening up new revenue paths for advanced space missions. The company also offers a solid 2.6% dividend yield, adding a moderately rare income element to a semiconductor market play.
Wall Street analysts are on board, with Citi analyst Christopher Danely holding a “buy” rating on MCHP, accompanied by a $90 target price. Susquehanna analyst Christopher Rolland also has a $90 price target on the stock, up from $60. The stock traded around $69 per share as of July 24.
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7 Best Semiconductor Stocks to Buy for 2025 originally appeared on usnews.com
Update 07/24/25: This story was previously published at an earlier date and has been updated with new information.
