10 Best Semiconductor Stocks To Buy For The AI Boom

Published July 26, 2023 at 2:04 pm EDT Updated August 19, 2026 at 10:09 am EDT

In this article, we will be taking a look at the 10 best semiconductor stocks to buy for the AI boom.

The Impact Of Artificial Intelligence

The artificial intelligence (AI) boom has revolutionized almost every industry and sector in the market today, and the technology sector is perhaps the most heavily impacted by this frenzy. Semiconductor companies, in particular, are well-positioned to benefit from the AI boom, with many companies reporting higher sales and revenue forecasts directly correlated with the developments being seen in this space today. One example is NVIDIA Corporation (NASDAQ:NVDA), which forecasted its second-quarter revenue to come in at $11 billion, going above analyst estimates. Jensen Huang, the founder, and CEO of the company, noted that they will be increasing the supply of their family of products to meet the rising demand for them.

On May 24, Needham & Co.’s Global Semiconductor Analyst, Rajvindra Gill, was invited on CNBC to share his insights on NVIDIA Corporation’s (NASDAQ:NVDA) first-quarter earnings report. Here’s what he had to say:

“If you look at their guide for July, it’s $11 billion. That’s $4 billion over the Street. I thought it was a typo when I first looked at it – it’s a massive guide up. Some of that might be higher pricing for their H-100.”

According to Gill, the “massive guide up” may have to do a lot with the increasing demand for NVIDIA Corporation’s (NASDAQ:NVDA) H-100, a demand he considers to be genuine and highly beneficial for the company. All in all, the company seems to have paved for itself a path for success in the rapidly transforming AI space at present and in the future. In an interview on CNBC Overtime this May, CEO Huang had the following to say on the future of AI:

“We have reinvented computing for the first time since the IBM system 360 60 years ago. There’s a trillion dollars worth of data center infrastructure based on the old method of doing computation. Now we have accelerated computing and we have the killer app for computing called generative AI.”

According to Huang, NVIDIA Corporation’s (NASDAQ:NVDA) recent partnership with ServiceNow, Inc. (NYSE:NOW) is also “a fantastic growth opportunity” for both these companies in relation to their AI endeavors. The latter company is now offering the former access to immense amounts of data and “the engine for transforming all of that data and domain expertise into generative AI models.”

Considering the immense benefits to be gained from active involvement in the AI space, many semiconductor companies are throwing in their cap with NVIDIA Corporation. For example, Lisa Su, the CEO of Advanced Micro Devices, Inc. (NASDAQ:AMD), mentioned in her June interview with CNBC that her company will be working on producing its own next-generation AI chip by the end of 2023. The next-generation GPU is aimed to pave the way for Advanced Micro Devices, Inc. to rival other semiconductor companies working on AI products today. Here are some comments from Su’s interview:

“Everybody’s talking about AI. We’ve been working on this roadmap for many, many years. M1-300 is our newest generation chip and frankly, it’s incredible. I mean, the amount of technology we have on this, a hundred and fifty-three billion transistors. Everybody’s talking about ChatGPT and Large Language Models, and M1-300 is actually designed exactly for this use case.”

Rising Demand For AI Chips

According to the interview, Advanced Micro Devices, Inc. expects to sample its new chip by the third quarter and be in production by the end of 2023. Su’s comments also signal that the company is focusing on making AI, particularly generative AI, its priority as it produces its new chips to meet the demand for AI chips. Here’s what Su noted on this matter:

“What we see is that there’s a tremendous demand for GPUs in AI space, for both training and inference. We work with all of the largest cloud manufacturers as well as many of the largest enterprise guys. And so, you know, the key is ‘let’s get these products to market as fast as possible.'”

According to Su, the Total Addressable Market (TAM) for chips like these is $30 billion in 2023, which her company plans to grow to over $150 billion. This highlights how not just the two companies mentioned here but others like QUALCOMM, Incorporated (NASDAQ:QCOM) and more will also have their eyes set on the prize in this space. Consequently, several semiconductor companies today are aiming to produce semiconductors and chips for AI to leave their mark and satisfy their customers. As this continues, these companies may soon become some of the best AI stocks or AI chip makers in the market. We have thus compiled a list of the companies we think are the best ones to play the AI boom.

10 Best Semiconductor Stocks To Buy For The AI Boom

Photo by Slejven Djurakovic on Unsplash

Our Methodology

We used a stock screener to get our list of the top semiconductors stocks in the market today and then ranked them using Insider Monkey’s hedge fund data for the first quarter when 943 hedge funds were tracked. These stocks are well-positioned to benefit from the AI boom considering their operations in the AI industry, mentioned for each company in their paragraphs below. The stocks are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest number.

Best Semiconductor Stocks To Buy For The AI Boom

10. Texas Instruments Incorporated (NASDAQ:TXN)

Number of Hedge Fund Holders: 52

Texas Instruments Incorporated (NASDAQ:TXN) is a semiconductor company well-positioned to benefit from the AI boom since it is introducing new Arm-based vision processors for use in processing visual images for AI. The company is based in Dallas, Texas.

We saw 52 hedge funds long Texas Instruments Incorporated in the first quarter, with a total stake value of $2.9 billion.

Susquehanna analyst Christopher Rolland reiterated a Positive rating on Texas Instruments Incorporated shares on June 13, alongside a $205 price target.

Holding 4.3 million shares in the company, Generation Investment Management was the largest shareholder in Texas Instruments Incorporated at the end of the first quarter.

9. Marvell Technology Inc. (NASDAQ: MRVL)

Number of Hedge Fund Holders: 62

John Vinh, an analyst at Keybanc, maintains an Overweight rating on Marvell Technology Inc. (NASDAQ: MRVL) shares, alongside an $80 price target, as of July 11.

Marvell Technology Inc. offers data infrastructure semiconductor solutions and is based in Wilmington, Delaware. The company’s CEO, Matt Murphy, sees its fiscal 2024 AI revenue at least doubling compared to the previous year.

Marvell Technology Inc. was spotted in the 13F holdings of 62 hedge funds during the first quarter. Their total stake value was $1.1 billion.

Like QUALCOMM, Incorporated, Advanced Micro Devices, Inc., and NVIDIA Corporation, Marvell Technology Inc. is a highly popular semiconductor stock involved in the AI space today.

8. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 68

There were 68 hedge funds long Intel Corporation (NASDAQ:INTC) in the first quarter, with a total stake value of $3.7 billion.

As of June 22, Cody Acree, an analyst at Benchmark, holds a Buy rating on Intel Corporation shares, alongside a price target of $39.

Intel Corporation is another semiconductor company working its way into the AI space, forecasting that it will be introducing its own AI computing chips in 2025. The company is based in Santa Clara, California.

Citadel Investment Group was the most prominent shareholder in Intel Corporation at the end of the first quarter, holding 17.2 million shares in the company.

7. QUALCOMM, Incorporated (NASDAQ:QCOM)

Number of Hedge Fund Holders: 69

QUALCOMM, Incorporated is a leading semiconductor company offering chips that provide stellar AI processing and performance. It is based in San Diego, California.

Vijay Rakesh at Mizuho holds a Buy rating on QUALCOMM, Incorporated shares as of June 22. The analyst also maintains a $140 price target on the stock.

QUALCOMM, Incorporated had 69 hedge funds long its stock at the end of the first quarter, with a total stake value of $1.7 billion.

Like Advanced Micro Devices, Inc. and NVIDIA Corporation, QUALCOMM, Incorporated is a stock that is joining the AI frenzy today.

6. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 72

Beech Hill Partners was the largest shareholder in Broadcom Inc. (NASDAQ:AVGO) at the end of the first quarter, holding 6,950 shares.

Broadcom Inc. is considered to be an undervalued giant in the AI space today since the company’s chips are essential for generative AI networking infrastructure. It is based in San Jose, California.

In total, 72 hedge funds held stakes in Broadcom Inc. in the first quarter. Their total stake value was $3.5 billion.

A Buy rating was reiterated on Broadcom Inc. shares on July 14 by William Stein, an analyst at Truist Securities. The analyst also raised his price target on the stock from $890 to $942.

5. Micron Solutions, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 73

Christopher Danely at Citigroup holds a Buy rating on Micron Solutions, Inc. (NASDAQ:MU) shares as of June 30, alongside a $75 price target.

Micron Solutions, Inc. is one of the few semiconductor companies making DRAM and NAND flash memory chips, which are essential for any AI system. This makes the company a direct beneficiary of the recent AI boom.

Our hedge fund data for the first quarter shows 73 funds long Micron Solutions, Inc., with a total stake value of $2.7 billion.

4. Analog Devices, Inc. (NASDAQ:ADI)

Number of Hedge Fund Holders: 73

Analog Devices, Inc. (NASDAQ:ADI) was seen in the portfolios of 73 hedge funds at the end of the first quarter, with a total stake value of $4.9 billion.

A Positive rating was reiterated on Analog Devices, Inc. shares on June 13 by Christopher Rolland at Susquehanna, who also holds a $215 price target on the stock.

Analog Devices, Inc. is a semiconductor company working on data conversion, signal processing, and power management tech. It is based in Wilmington, Massachusetts, and is offering a new line of AI microcontrollers that run AI inferences much faster than other solutions.

First Pacific Advisors mentioned Analog Devices, Inc. in its first-quarter 2023 investor letter:

“Analog Devices, Inc. (NASDAQ:ADI) stock price declined in the first half of 2022, along with its semiconductor peers. That sector has since rebounded, lifting ADI with it. We believe ADI is a well-run company and a secular grower, which should augur well for its future. However, given that it operates in a cyclical industry, we will not be surprised when its shares periodically trade down.”

3. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 91

Advanced Micro Devices, Inc. is a company set to rival others in the AI space with its AI chips.

As of July 12, TD Cowen analyst Matthew Ramsay holds an Outperform rating and $135 price target on Advanced Micro Devices, Inc. shares.

In the first quarter, 91 hedge funds were long Advanced Micro Devices, Inc.. Their total stake value was $4.9 billion.

2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 102

Out of the 943 hedge funds tracked by Insider Monkey in the first quarter, 102 funds were long Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), with a total stake value of $8.9 billion.

Mehdi Hosseini at Susquehanna holds a Positive rating on Taiwan Semiconductor Manufacturing Company Limited shares as of June 16, alongside a $128 price target.

Taiwan Semiconductor Manufacturing Company Limited offers cutting-edge AI processors used by big tech companies across the US today, alongside other semiconductor products and solutions.

Here’s what Baron Funds said about Taiwan Semiconductor Manufacturing Company Limited in its first-quarter 2023 investor letter:

“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) contributed in the first quarter due to easing geopolitical concerns and expectations for end-demand recovery later in 2023. We retain conviction that Taiwan Semi’s technological leadership; pricing power; and exposure to secular growth markets, including high-performance computing, automotive, 5G, and IoT; will allow the company to sustain strong earnings growth over the next several years.”

1. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 132

NVIDIA Corporation is the current market leader in the AI chips space, where it dominates all other rival companies with its fast processing chips and GPUs.

NVIDIA Corporation had 132 hedge funds long its stock during the first quarter. Their total stake value in the company was $12.3 billion.

A Buy rating was maintained on NVIDIA Corporation shares by William Stein at Truist on July 14, alongside a $545 price target.

Artisan Partners said the following about NVIDIA Corporation in its second-quarter 2023 investor letter:

“Top contributors to performance for the quarter included graphics semiconductor company NVIDIA Corporation (NASDAQ:NVDA). Nvidia rose after reporting strong results and forecasting significantly higher data center revenues for the coming quarter, driven by rising artificial intelligence investments around the world.

When we are successful in achieving disproportionate equity outcomes, we need a process for managing them. Entering this year, we had a ~6.5% position in Nvidia. Due to the enthusiasm for generative AI and a rapid conclusion to “cloud optimization,” the stock has surged 189.5% this year including 52.31% in Q2. We retained an investment in Nvidia with less capital at risk, an approach which afforded us the potential to prudently participate in excellent investments over long periods of time. Notably, despite our gradual position reductions, Nvidia has contributed 1491bps to performance since inception. In turn, these value pathways form the foundation upon which our risk management framework rests, and put us in position to execute our investment program in future periods of duress.”