In this article, we will discuss the 10 Best Semiconductor Stocks to Buy Heading into 2026
The Semiconductor Industry Association (SIA) announced that global semiconductor sales came in at $208.4 billion during Q3 2025, reflecting a rise of 15.8% compared to Q2 2025. Global sales amounted to $69.5 billion in September 2025, implying 25.1% YoY growth and 7.0% growth from August 2025. The market growth stemmed from higher demand across a range of semiconductor products, including memory and logic. Notably, YTD growth was aided by sales into the Asia Pacific region and the Americas.
Trends in the Semiconductor Industry
Ken Research (a global consulting firm), while quoting World Semiconductor Trade Statistics, highlighted that the global semiconductor market was valued at USD 627 billion in 2024. From smartphones to satellites, the firm believes that the semiconductors underpin over 20% of global manufacturing output.
With the governments tightening export rules and subsidizing the domestic fabrication, the trade of chips transitioned from a supply-chain function to a national security instrument.
Amidst such trends, we will now have a look at the 10 Best Semiconductor Stocks to Buy Heading into 2026.
Our Methodology
To list the 10 Best Semiconductor Stocks to Buy Heading into 2026, we used a screener to shortlist stocks catering to the broader semiconductor space and in which analysts see at least 20% upside to. Next, we chose the ones popular among hedge funds, as of Q3 2025. Finally, the stocks are arranged in ascending order of their average upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Note: All the data is as of November 25
10 Best Semiconductor Stocks to Buy Heading into 2026
10. Qnity Electronics, Inc. (NYSE:Q)
Number of Hedge Fund Holders: N/A
Average Upside Potential: ~38.8%
Qnity Electronics, Inc. (NYSE:Q) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 25, RBC Capital reduced the price target on the company’s stock to $110 from $120 while keeping an “Outperform” rating, as reported by The Fly. As per the analyst, recent weakness in the stock can be because of uncertainty in semiconductor growth outlook, and concerns related to the AI bubble. Qnity Electronics, Inc. (NYSE:Q)’s stock witnessed a decline of over ~16% in the recent past.
In Q3 2025, Qnity Electronics, Inc. (NYSE:Q)’s net sales came in at $1.3 billion, reflecting a rise of 11% from the prior-year period. This growth stemmed from higher AI demand throughout advanced nodes, advanced packaging, and thermal management solutions. Its net income came in at $223 million in Q3 2025 compared to $207 million in Q3 2024, amidst higher revenues.
Qnity Electronics, Inc. (NYSE:Q)’s CEO highlighted that it delivered 6 consecutive quarters of robust organic growth, demonstrating the breadth of its portfolio and the power of its innovation partnerships with customers.
Qnity Electronics, Inc. (NYSE:Q) is engaged in providing materials and solutions to the semiconductor and electronics industries.
9. CEVA, Inc. (NASDAQ:CEVA)
Number of Hedge Fund Holders: 12
Average Upside Potential: ~62.5%
CEVA, Inc. (NASDAQ:CEVA) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 17, the company announced that it started an underwritten public offering of 3,000,000 shares of its common stock. CEVA, Inc. (NASDAQ:CEVA) also agreed to grant the underwriters a 30-day option to buy up to an additional 450,000 shares of the common stock.
CEVA, Inc. (NASDAQ:CEVA) plans to use net proceeds to finance potential acquisitions of, or investments in, complementary technologies or businesses. It might also use net proceeds for working capital, capital expenditures, share repurchases, and other general corporate purposes.
In a separate development, CEVA, Inc. (NASDAQ:CEVA) saw total revenues of $28.4 million in Q3 2025 compared to $27.2 million in Q3 2024, with licensing and related revenue rising 2.9% and royalty revenue increasing 6.2%. CEVA, Inc. (NASDAQ:CEVA)’s non-GAAP net income and diluted income per share for Q3 2025 amounted to $2.7 million and $0.11, respectively. Overall, the company surpassed expectations on both revenue and non-GAAP diluted income per share due to robust licensing execution and strong royalty growth.
For Q4 2025, the company expects total revenue of between $29 million – $33 million.
CEVA, Inc. (NASDAQ:CEVA) offers silicon and software IP solutions to semiconductor and OEM companies in the US, Europe, the Middle East, the Asia Pacific, and internationally.
8. STMicroelectronics N.V. (NYSE:STM)
Number of Hedge Fund Holders: 19
Average Upside Potential: ~27.5%
STMicroelectronics N.V. (NYSE:STM) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 20, TSE and STMicroelectronics N.V. (NYSE:STM) signed a physical Power Purchase Agreement (PPA) that revolves around supplying renewable electricity from solar parks to STMicroelectronics’ sites in France. Notably, TSE will be supplying the company with renewable power generated by 3 solar parks in France, operated by TSE, totalling ~43 MW. This 15-year contract, which begins in 2027, exhibits an overall volume of ~780 GWh.
In a separate development, STMicroelectronics N.V. (NYSE:STM)’s net revenues totaled $3.19 billion in Q3 2025, reflecting a YoY fall of 2.0%, with YoY net sales to OEMs and Distribution falling 5.1% and rising 7.6%, respectively. On a sequential basis, net revenues grew 15.2%, amidst increased revenues in Personal Electronics, while Automotive and Industrial performed as anticipated.
STMicroelectronics N.V. (NYSE:STM)’s operating income fell from $381 million in Q3 2024 to $180 million in Q3 2025. The company’s operating income for Q3 2025 consisted $37 million impairment, restructuring charges, and other related phase-out costs. This demonstrates impairment of assets and restructuring charges predominantly related to the company-wide program to reshape manufacturing footprint and resize the global cost base.
STMicroelectronics N.V. (NYSE:STM) is engaged in designing, developing, manufacturing, and selling semiconductor products.
7. Power Integrations, Inc. (NASDAQ:POWI)
Number of Hedge Fund Holders: 27
Average Upside Potential: ~63.0%
Power Integrations, Inc. (NASDAQ:POWI) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 18, Tore Svanberg, an analyst from Stifel Nicolaus, maintained a “Buy” rating on the company’s stock, and the associated price target was same at $56.00. The analyst’s rating is backed by a combination of factors, which include the strategic leadership changes at the company. Nancy Erba was appointed as a CFO, bringing nearly 2 decades of experience in financial leadership roles. This is seen as a significant positive development for Power Integrations, Inc. (NASDAQ:POWI), added Svanberg.
Power Integrations, Inc. (NASDAQ:POWI)’s Q3 2025 revenues rose 3% sequentially to $119 million, with the Industrial end-market supported by strength and traction in high-voltage DC transmission in the company’s high-power business and growth in metering and automotive. The company saw a loss from operations of $3.95 million in Q3 2025, compared to income from operations of $11.5 million in Q3 2024, amidst higher operating expenses.
Power Integrations, Inc. (NASDAQ:POWI) remains well-placed for strong growth in 2025 despite the tough economic backdrop, and is focused on secular growth opportunities in high voltage, which include GaN, grid modernization, electric transportation, and data center.
Power Integrations, Inc. (NASDAQ:POWI) provides analog and mixed-signal semiconductor solutions to original equipment manufacturers and distributors.
6. SiTime Corporation (NASDAQ:SITM)
Number of Hedge Fund Holders: 35
Average Upside Potential: ~24.4%
SiTime Corporation (NASDAQ:SITM) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 20, Loop Capital analyst Gary Mobley began coverage of the company’s stock with a “Buy” rating and a price objective of $350. As per the firm, SiTime Corporation (NASDAQ:SITM)’s product development in precision timing would become crucial for a growing list of system manufacturers. The firm believes that the increasing importance that system manufacturers would place on precision timing will be driven by market forces as well as system design challenges.
In a separate development, SiTime Corporation (NASDAQ:SITM)’s net revenue in Q3 2025 came in at $83.6 million compared to $57.7 million in the year-ago quarter. Notably, AI growth fueled this revenue amidst higher adoption of the company’s high-performance, resilient, and reliable Precision Timing solutions.
Considering the strength of its Communications-Enterprise-Datacenter business, SiTime Corporation (NASDAQ:SITM) expects its rapid growth to continue in the future quarters and to surpass 50% YoY for 2025. Notably, it saw a loss from operations of $16.02 million in Q3 2025 compared to $24.8 million in Q3 2024, amidst strong growth in gross profit.
SiTime Corporation (NASDAQ:SITM) is engaged in designing, developing, and selling silicon timing systems solutions.
5. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 37
Average Upside Potential: ~30.1%
Arm Holdings plc (NASDAQ:ARM) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 12, Loop Capital lifted the price target on the company’s stock to $180 from $155, while keeping a “Buy” rating as reported by The Fly. The firm believes that the company’s earnings report was solid. Furthermore, the analyst believes that Arm Holdings plc (NASDAQ:ARM) continues to see design win traction throughout its end markets.
In Q2 2026, the company saw its revenue grow by 34% YoY to $1.14 billion, with royalty revenue increasing 21% YoY to a record of $620 million. Furthermore, its royalty revenue growth stemmed from all the target end markets, which include smartphones, data center, automotive, and IoT, showcasing its momentum.
Arm Holdings plc (NASDAQ:ARM)’s non-GAAP EPS came in at $0.39, $0.06 above the midpoint of its guidance range, thanks to the increased revenue and slightly lower OpEx. Its RPO rose 1% QoQ to $2,246 million, and Arm Holdings plc (NASDAQ:ARM) anticipates recognizing ~29% of RPO as revenue over the upcoming 12 months, 16% over the subsequent 13 to 24 months, and the remainder thereafter.
Arm Holdings plc (NASDAQ:ARM) architects, develops, and licenses central processing unit products as well as associated technologies for semiconductor companies and OEMs.
4. ON Semiconductor Corporation (NASDAQ:ON)
Number of Hedge Fund Holders: 45
Average Upside Potential: ~22.4%
ON Semiconductor Corporation (NASDAQ:ON) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 24, Morgan Stanley analyst Joseph Moore lifted the price target on the company’s stock to $56 from $55, while keeping an “Equal Weight” rating, as reported by The Fly.
The analyst noted the company’s recent 8-K filing in which management approved recognition of additional pre-tax non-cash impairment and accelerated depreciation charges of between $200 million and $300 million. The impairment and accelerated depreciation charges are for long-lived assets associated with investments in manufacturing assets at the company’s certain manufacturing facilities.
As per the management, such charges would reduce the company’s recurring depreciation expense in an amount estimated to be $10 million – $15 million in 2026. The analyst believes that the incremental impairments are most likely related to ON Semiconductor Corporation (NASDAQ:ON)’s Silicon Carbide manufacturing assets.
In a different development, it was announced that ON Semiconductor Corporation (NASDAQ:ON)’s revenue came in at $1.5 billion and $1.76 billion for the quarters ended October 3, 2025, and September 27, 2024, respectively, reflecting a 12% YoY decline, with revenue from PSG falling ~11% YoY.
Its diluted EPS stood at $0.63 in Q3 2025 as compared to $0.41 in Q2 FY 2025 on a GAAP basis, as ON Semiconductor Corporation (NASDAQ:ON) saw continued signs of stabilization throughout its core markets, and positive growth in AI.
ON Semiconductor Corporation (NASDAQ:ON) offers intelligent sensing and power solutions.
3. Astera Labs, Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holders: 57
Average Upside Potential: ~29.3%
Astera Labs, Inc. (NASDAQ:ALAB) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 17, Northland analyst Gus Richard upgraded the company’s stock to “Outperform” from “Market Perform” with a price objective of $175. As per the analyst, Astera Labs, Inc. (NASDAQ:ALAB) works with several hyperscalers, with Amazon being its lead customer. The analyst is also confident in Amazon’s data center spending and Astera Labs, Inc. (NASDAQ:ALAB)’s revenue growth.
In Q3 2025, the company’s total revenue rose 104% YoY and 128% YoY for the three and nine months ended September 30, 2025, respectively. This rise was mainly because of an increase in overall unit shipments, aided by increased demand for its Aries, Scorpio, and Taurus products, and elevated overall average selling prices due to an increased mix of hardware modules and Scorpio products.
Astera Labs, Inc. (NASDAQ:ALAB)’s operating income amounted to $55.4 million in Q3 2025, compared to an operating loss of $8.8 million amidst strong revenue growth. During Q3 2025, the company saw strong demand and upside throughout its signal conditioning, smart cable module (SCM), and switch fabric portfolios as new AI platforms ramped up production. For Q4 2025, the company expects revenue of between $245 million – $253 million.
Astera Labs, Inc. (NASDAQ:ALAB) is engaged in designing, manufacturing, and selling semiconductor-based connectivity solutions for cloud and AI infrastructure.
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 115
Average Upside Potential: ~37%
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 24, the company announced that Zyphra achieved a significant milestone in large-scale AI model training with the development of ZAYA1. This is the first large-scale Mixture-of-Experts (MoE) foundation model trained with the help of an AMD GPU and networking platform.
Notably, the results from Zyphra demonstrate that the model offers competitive or superior performance to leading open models throughout reasoning, mathematics, and coding benchmarks. This exhibits the scalability and efficiency of AMD Instinct GPUs for production-scale AI workloads.
In a different development, Advanced Micro Devices, Inc. (NASDAQ:AMD) highlighted that AMD Instinct™ MI350 Series GPUs demonstrate the fastest ramping product in its history. Over the upcoming 3 – 5 years, and considering the leadership product portfolio, Advanced Micro Devices, Inc. (NASDAQ:AMD) anticipates delivering over 60% revenue CAGR for its data center business and over 10% revenue CAGR throughout its Embedded and Client, and Gaming businesses.
Across Client and Gaming, the company has been strengthening its leadership, with the expansion of enterprise adoption as well as a growing portfolio of AMD Ryzen processors. Advanced Micro Devices, Inc. (NASDAQ:AMD) anticipates exceeding 40% client revenue market share while building on a base of over 1 billion AMD-based gaming devices and 3 generations of leadership consoles.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
Average Upside Potential: ~26.5%
NVIDIA Corporation (NASDAQ:NVDA) is one of the best Semiconductor Stocks to Buy Heading into 2026. On November 20, Raymond James analyst Simon Leopold initiated coverage of the company’s stock with the price objective of $272. Notably, the firm highlighted NVIDIA Corporation (NASDAQ:NVDA)’s leadership position in accelerated and AI computing, which tends to benefit directly from the multi-year build-out of AI factories as well as data-center-scale platforms.
Furthermore, the firm noted NVIDIA Corporation (NASDAQ:NVDA)’s installed base of hundreds of millions of GPUs, over 6 million developers, and deep integration in enterprise and sovereign AI initiatives worldwide. Overall, the company remains uniquely positioned at the center of the AI industrial revolution.
The firm expects peak Blackwell chip sales to reach 6.9 million units in calendar year 2026, as compared to over 3 million units Nvidia would have shipped through October, and 7 million on order for the balance of Q4 2026 and FY 2027. While Raymond James acknowledged the risks due to the power constraints and AI cycle fluctuations, the firm views NVIDIA Corporation (NASDAQ:NVDA)’s shares as reasonably valued.
While we acknowledge the potential of NVDA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NVDA and that has 100x upside potential, check out our report about this cheapest AI stock.
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