Semiconductor Giants to Watch in 2025

in between Chip stockAll three stand out for their ability to dominate their respective markets. With the AI ​​arms race in big tech, their leading positions set their stocks up for big returns in 2024. That’s exactly what happened, with these names returning 182%, 123%, and 97% by the end of December 26. As we move into 2025, these companies can continue to capitalize on their strengths and have another strong year. Below, I will reveal these firms and the thesis why they can continue to grow.

NVIDIA: King of Kings

The first is unbreakable NVIDIA NASDAQ: NVDA. Customers have shown insatiable demand for the company’s graphical processing units that accelerate computations for AI workloads. And just because a new year is upon us, it’s hard to see this trend changing. So far, no other company has stepped up to compete with NVIDIA in system-based AI infrastructure and GPUs. Advanced Micro Devices NASDAQ: AMD is trying to catch up, but the results are not yet comparable.

Anyone who wants high-end AI infrastructure will need to go through NVIDIA one way or another. That is unless they are willing to pay to buy from another company on this list. NVIDIA faces more competition. But it still has the fastest GPUs. It also has excellent systems and software to package with them.

Within this domain, it is the undisputed winner. The biggest risk for NVIDIA isn’t competition; There is a view that the AI ​​revolution does not bear much promised fruit. I don’t believe it will, but there are likely to be speedbumps along the way. In 2025, more AI applications with real-world impact should emerge. This should further boost demand for NVIDIA’s advanced chips.

Broadcom: NVIDIA’s real arch rival

Broadcom NASDAQ: AVGO is another company that dominates its respective niche of the semiconductor market. It is actually the only firm competing with NVIDIA when it comes to providing massive amounts of AI computing power. However, it offers a different solution to the same problem than NVIDIA. The company focuses on designing application-specific integrated circuits (ASICs). These are chips that the company makes for a specific customer, customizing them to meet their needs. Since they are the only customers who can use them, purchasing these chips from Broadcom requires a large upfront investment. However, the specificity of these chips means that they are very efficient. Over time, they save data center operators money due to their low energy consumption and long lifespan.

Broadcom shares have been skyrocketing recently after the firm’s Q3 earnings release. The company did not disappoint, Total revenue is growing 51% and AI-driven revenue by 220%. The company also announced that it has acquired three new hyperscaler customers with the opportunity to add two more. These announcements represent billions in future revenue for the firm.

On top of that, Broadcom has other parts of its business that are in decline. Analysts are waiting for a return to growth in these markets. If that happens in 2025, with massive ASIC demand, Broadcom stock could have another great year.

TSMC: One chip maker to rule them all

The latter is one of the most important companies in the world, Taiwan Semiconductor Manufacturing Corporation NYSE: TSM. The company is at the center of a potential war between the United States and China, showing just how important it is. TSMC fits seamlessly into the other two stocks, as it’s the company that actually manufactures many of the chips NVIDIA and Broadcom design. As of early 2024, the company manufactured nearly 90% of the world’s most advanced semiconductors. This is the situation even today.

Thus, as long as there is continued demand for more advanced semiconductors, TSMC’s services will remain in strong demand. As technology companies and governments always have strong interests in staying ahead of their competition, I don’t see the importance of TSMC buzzing anytime soon.

Barring a major conflict in the South China Sea, TSMC should continue its strong performance. TSMC is also not immune to this risk. To combat this, it is building facilities in the United States. Reports say that TSMC is in talks with NVIDIA to develop its new Blackwell AI chip at its Arizona plant.

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