In this article, we will discuss the 10 Most Buzzing AI Semiconductor Stocks to Buy in 2026.
The semiconductor sector is on fire amid an artificial intelligence-driven market. That’s evident as the S&P 500 semiconductor sector has gained 35% year to date, outperforming the overall market, which is up by 8% over the same period. The iShares Semiconductor ETF (SOXX) is also up about 65% over the same period, benefiting from capital flowing into artificial intelligence-sensitive names.
“It’s really the AI infrastructure build out. It’s the computing needs, it’s the networking needs,” said King Lip, chief strategist at BakerAvenue Wealth Management in San Francisco, which has over-weighted semi stocks in its portfolios. “It’s really a multi-year capex cycle — very exciting in our view as it relates to semiconductors.”
The outperformance has come on semiconductor stocks, overtaking software as market leaders amid the AI boom. The shift has also been driven by strengthened investor confidence in companies providing the much-needed hardware infrastructure crucial to AI advancements. The sentiments have also improved, driven by growing confidence that AI spending and computing infrastructure remain strong despite a slowing economy.
“It’s sort of a perfect mix – there is enough of a fundamental story, and then the technical story is also quite strong,” said Steve Edwards, senior investment strategist at Morgan Stanley Wealth Management. “Those two things are coming together into a confluence that has created a very enthusiastic and optimistic investor base, and that is driving that momentum.”
Likewise, private investment firms backed by ultra-wealthy individuals are doubling down on chipmakers, helping fuel the rally in semiconductor stocks. Appaloosa Management, Soros Fund Management, and Duquesne Family Office are among the big investment firms that have ramped up stakes in major semiconductor stocks.
With that in mind, let’s take a look at some of the most buzzing AI semiconductor stocks to buy in 2026 amid the AI boom.
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Our Methodology
To compile the list of the most buzzing AI semiconductor stocks to buy in 2026, we used Yahoo Finance and Finviz screener to scan for semiconductor companies at the heart of the AI revolution. From the list, we settled on companies with significant industry development and upside potential of more than 20% (as of May 21). We also detailed the number of hedge funds that hold stakes in them in Q4 2025. Finally, we ranked the stocks in ascending order by their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Most Buzzing AI Semiconductor Stocks to Buy in 2026
10. Microchip Technology Incorporated (NASDAQ:MCHP)
Stock Upside Potential: 24.74%
Number of Hedge Fund Holders: 61
Microchip Technology Incorporated (NASDAQ:MCHP) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 7, Microchip Technology Incorporated (NASDAQ:MCHP) delivered impressive fourth-quarter and fiscal 2026 results that asserted improved operating leverage and continued progress in balance sheet strength.
The company also reiterated that it continues to see strong customer engagement and expanding design activity in data center and artificial intelligence applications. The growth is driven by the breadth and performance of high-speed connectivity in the compute portfolio. The addition of the Gen6 PCIe retimer solutions further strengthens Microchip Technology’s data center offering.
The sentiments align with the company’s 35.1% jump in net sales to $1.311 billion in the fourth quarter, above the midpoint of guidance at $1.260 billion. On a non-GAAP basis, net income in the quarter totaled $327.3 million, or $0.57 a share, a significant improvement from $61.4 million, or $0.11 a share, delivered in the same quarter last year. Full-year net sales were up 7.1% to $4.40 billion as net income increased $31.8% to $933.9 million.
Following the impressive financial results, the board of directors has approved a quarterly cash dividend of 45.5 cents a share payable on June 5.
Microchip Technology Incorporated (NASDAQ:MCHP) is a major semiconductor company that designs, manufactures, and sells specialized electronic components. They specialize in microcontrollers, analog integrated circuits, and memory solutions that act as the “brains” of everyday devices.
9. Allegro MicroSystems, Inc. (NASDAQ:ALGM)
Stock Upside Potential: 26.72%
Number of Hedge Fund Holders: 28
Allegro Microsystems Inc. (NASDAQ:ALGM) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 7, Jefferies analyst Blayne Curtis reiterated Allegro Microsystems Inc. (NASDAQ:ALGM) as Buy and raised the price target to $62 from $45. The price target hike comes amid growing confidence that the data center business is becoming a meaningful part of the company’s long-term outlook.
The sentiments come on the heels of the leader in power and sensing semiconductor solutions delivering impressive fourth-quarter and full-year 2026 results. The company finished its fiscal 2026 on a strong sales and earnings momentum.
For the fifth consecutive quarter, sales grew to $243.19 million in the fourth quarter, compared with $192.82 million in the same quarter last year. Full-year net sales totaled $890.1 million compared to $725 million in 2025.
Diluted earnings per share more than tripled to $0.17 compared to $0.06 a share delivered the same quarter last year. Full-year earnings per share more than doubled to $0.54 per share, compared with $0.24 per share in fiscal 2025.
Allegro Microsystems expects sales in the first quarter of fiscal 2027 to range between $245 million and $255 million, representing 23% year-over-year growth at the midpoint of the range. Diluted earnings per share are expected to range between $0.19 and $0.23.
Allegro MicroSystems, Inc. (NASDAQ:ALGM) is a global semiconductor designer and manufacturer, specializing in sensor-integrated circuits (ICs) and application-specific analog power ICs. Their technology is primarily used to manage power and sense motion in the automotive, industrial, and consumer electronics markets.
8. Tower Semiconductor Ltd. (NASDAQ:TSEM)
Stock Upside Potential: 27.02%
Number of Hedge Fund Holders: 46
Tower Semiconductor Ltd. (NASDAQ:TSEM) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 14, analysts at Benchmark reiterated a Buy rating on Tower Semiconductor Ltd. (NASDAQ:TSEM) and raised the price target to $335 from $230.
The bullish stance and price target hike come on the heels of Tower Semiconductor indicating that contractual commitments for 2028 are significantly higher. In addition, the company holds $1.3 billion in contracted fiscal 2027 silicon photonics revenue, backed by $290 million in customer payments.
According to Benchmark, Tower Semiconductor’s long-term outlook is intact, given the combination of hard customer commitment and pre-funded capacity reservations. In addition, the $1.3 billion contracted for 2027 reflects only the contractual base level, not the full silicon revenue forecast.
The contracts for 2028 signal even higher capacity reservations with additional prepayments expected. Additionally, the optical business is expected to be a core driver of the company’s overall model.
Tower Semiconductor Ltd. (NASDAQ:TSEM) is a specialty foundry that manufactures analog and mixed-signal semiconductor chips for over 300 customers globally. Rather than designing chips for their own brand, they take proprietary designs from “fabless” companies and build the physical wafers used in smartphones, cars, medical devices, and aerospace systems.
7. NVIDIA Corporation (NASDAQ:NVDA)
Stock Upside Potential: 27.82%
Number of Hedge Fund Holders: 264
NVIDIA Corporation (NASDAQ:NVDA) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 20, NVIDIA Corporation (NASDAQ:NVDA) CEO reiterated that NVIDIA Corp (NASDAQ: NVDA) is uniquely positioned to capitalize on the largest build-out of artificial intelligence factories. That’s in part because the company runs in every cloud, powers every frontier, and scales everywhere AI is produced.
The remarks came on the heels of the company delivering record revenue in its first quarter of fiscal 2027. Revenue in the quarter was up 85% year over year to $81.6 billion. Operating income rose 147% year over year to $53.53 billion, while net income increased 211% to $58.32 billion. Diluted earnings per share improved 214% to $2.39.
During the quarter, Nvidia returned $20 billion to shareholders through dividends and share buybacks. The company also increased its quarterly cash dividend from $0.01 per share to $0.25 per share. For the second quarter, the company expects revenue of $91 billion plus or minus 2%.
NVIDIA Corporation (NASDAQ:NVDA) creates the foundational hardware, software, and platforms that power the artificial intelligence boom. It also provides the comprehensive infrastructure from data center systems to AI software and services that allow industries to train, refine, and deploy advanced artificial intelligence.
6. Applied Materials, Inc. (NASDAQ:AMAT)
Stock Upside Potential: 29.30%
Number of Hedge Fund Holders: 111
Applied Materials Inc. (NASDAQ:AMAT) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 20, Applied Materials Inc. (NASDAQ:AMAT) announced it is teaming up with Broadcom to enhance the development of advanced chip packaging technologies for AI systems.
Broadcom is to join the Applied Materials EPIC platform. In return, the two are to focus on the research and development needed to accelerate the introduction of packaging technologies for next-generation AI chips. They will also leverage Applied Materials’ global network of innovation centers to drive co-innovation across the ecosystem.
Ultimately, Applied Materials and Broadcom will provide system designers early access to materials and process equipment innovations. The collaboration comes amid robust adoption of advanced packaging techniques needed to boost the energy-efficient performance of AI systems.
Applied Materials’ EPIC Center in Silicon Valley is one of the largest investments in semiconductor equipment research and development. The facility strives to reduce the time to commercialization from early-stage research to full-scale manufacturing.
Applied Materials, Inc. (NASDAQ:AMAT) designs, manufactures, and services the specialized equipment and software used to build semiconductor chips (integrated circuits) and advanced displays. It is a critical foundational company for the global electronics industry, supplying the machines that allow manufacturers to create smaller, faster, and more energy-efficient microchips.
5. FormFactor, Inc. (NASDAQ:FORM)
Stock Upside Potential: 30.79%
Number of Hedge Fund Holders: 37
FormFactor, Inc. (NASDAQ:FORM) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 12, analysts at Craig-Hallum upgraded FormFactor Inc. (NASDAQ:FORM) to a Buy from a Hold with a $175 price target.
The price target represents 35 times the company’s potential earnings of $5 per share on $1.6 billion in revenue. Additionally, the stock has delivered a return of over 250% over the past year.
The upgrade comes on the heels of the company’s first-quarter revenue growing sequentially and hitting a second consecutive all-time high. In addition, gross margin and earnings per share came above the high end of the outlook range.
Earnings per share totaled $0.56, better than the $0.44 expected, while revenue reached $226.1 million, better than the $203.84 million expected. The better-than-expected results came as FormFactor delivered record DRAM revenue on increased demand in HBM applications.
Additionally, FormFactor is benefiting from an increase in Foundry & Logic demand driven by growth in probe cards and networking applications.
FormFactor, Inc. (NASDAQ:FORM) is a leading provider of essential test and measurement technologies for the semiconductor industry. They design and manufacture critical hardware and software—such as wafer probe cards and analytical probe stations—that enable chipmakers to validate integrated circuits (ICs) and detect defects before packaging.
4. Cohu, Inc. (NASDAQ:COHU)
Stock Upside Potential: 34.87%
Number of Hedge Fund Holders: 28
Cohu Inc. (NASDAQ:COHU) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 12, Cohu Inc. (NASDAQ:COHU) confirmed it has received multiple orders worth about $5 million for the Diamondx platform, which delivers high current capability and scalable multi-site throughput.
The leading semiconductor manufacturer behind the orders plans to use the platform to support the development and manufacturing of next-generation gallium nitride power devices for use in AI data center power architectures. In addition, the orders are poised to expand Cohu’s position in the fast-growing AI Data center market.
The $5 million in orders also underscores the company’s product portfolio’s ability to meet rising demand for higher power and higher-efficiency power conservation. Cohu’s platforms are designed to support the full life cycle of GaN power devices as data center operators increasingly re-architect power delivery to improve efficiency.
The Diamondx test configurations designed for power devices enable high-precision characterization and production testing of GaN devices used in AI data center power stages.
“GaN devices offer compelling efficiency and power density advantages, and the DiamondX platform enables customers to test accurately and economically at scale as they move from device characterization to high-volume production,” said Luis Müller, Cohu President and CEO.
Cohu, Inc. (NASDAQ:COHU) is a global supplier of semiconductor industry equipment and software. They specialize in “back-end” manufacturing—building the machinery, automation systems, and analytics platforms that test, inspect, and handle microchips before they are shipped to electronics manufacturers.
3. Diodes Incorporated (NASDAQ:DIOD)
Stock Upside Potential: 38.13%
Number of Hedge Fund Holders: 25
Diodes Incorporated (NASDAQ:DIOD) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 7, Diodes Inc. (NASDAQ:DIOD) delivered impressive first-quarter 2026 results. The company benefited from solid demand recovery and momentum across key focus areas of automotive, industrial, and AI server-related applications.
First-quarter revenue was up 22% year over year to $405.5 million, compared to $391.6 million in the prior quarter. Adjusted net income more than doubled to $19.8 million compared to $8.8 million in Q1 2025. Earnings per share came in at $0.43, up from $0.19 a share delivered the same quarter last year.
The first quarter marked the fifth consecutive quarter of double-digit growth as Diodes continues to benefit from increased opportunities and orders from automotive customers, as well as an improved outlook across industrial applications.
Diodes expects the underlying growth momentum to continue in the second quarter, with revenue expected to increase 18.8% to $435 million. It would mark the sixth consecutive quarter of double-digit year-over-year growth.
Diodes Incorporated (NASDAQ:DIOD) is a global manufacturer and supplier of discrete, logic, analog, and mixed-signal semiconductors. Their electronic components control, manage, and protect the flow of power and data in modern electronics.
2. ASE Technology Holding Co., Ltd. (NYSE:ASX)
Stock Upside Potential: 39.20%
Number of Hedge Fund Holders: 18
ASE Technology Holding Co., Ltd. (NYSE:ASX) is one of the most buzzing AI semiconductor stocks to buy in 2026. On April 29, ASE Technology Holding Co., Ltd. (NYSE:ASX) delivered solid first-quarter 2026 financial results characterized by growth in packaging testing and EMS operations.
Net revenue was up 17.2% to NT$173.66 billion, while net income increased to NT$14.14 billion from NT$7.554 billion in 1Q25. The robust revenue growth was driven by a 29.7% year-over-year increase in ATM segment revenue to NT$112.43 billion, which helped offset a 0.7% decline in EMS revenue to NT$61.88 billion.
On the other hand, net revenues from packaging operations accounted for 51% of total revenues, with testing operations accounting for 12%, EMS operations for 36%, and others for 1%. Diluted earnings per share for the quarter also improved to NT$3.08 (or US$0.195 per ADS), compared to NT$1.64 for 1Q25. Gross margin improved to 20.1% from 19.5% in the prior quarter.
ASE Technology Holding Co., Ltd. (NYSE:ASX) is the world’s largest independent provider of semiconductor manufacturing services, specializing in outsourced assembly and testing (OSAT). The company packages silicon wafers into finished, protected microchips and offers full electronic manufacturing services, acting as a crucial supply chain partner for global tech and electronics brands.
1. Himax Technologies, Inc. (NASDAQ:HIMX)
Stock Upside Potential: 55.52%
Number of Hedge Fund Holders: 11
Himax Technologies, Inc. (NASDAQ:HIMX) is one of the most buzzing AI semiconductor stocks to buy in 2026. On May 7, Himax Technologies, Inc. (NASDAQ:HIMX) reiterated that it expects growth momentum to persist throughout the year, driven by new automotive projects and growth in the non-drive IC business.
The company is increasingly focusing on key growth areas of smart glasses, ultralow power AI, and CPO as it also navigates an uncertain macro environment. The emerging technologies are well poised to diversify the company’s revenue base and deliver attractive gross margins. The sentiments come against the backdrop of solid first-quarter results, whereby revenue totaled $199 million, a slight 2% sequential decline.
Operating profit came in at $10.2 million, with an operating margin of 5.1%, up from 3.4% in last year’s same quarter. After tax profit improved to $8 million or 4.6 cents per diluted ADS compared to $6.3 million or 3.6 cents per diluted ADS last quarter.
Similarly, the company’s board has approved a cash dividend of 25.2 cents per ADS. The dividend is to be paid on July 10, 2026, to shareholders of record as of June 30, 2026.
“Since our IPO in 2006, we have consistently rewarded shareholders for their ongoing commitment with our dividend policy,” said Mr. Jordan Wu, President and Chief Executive Officer of Himax. “This year, we are pleased to declare an annual cash dividend of 25.2 cents per ADS, representing a payout ratio of 100.0% of last year’s profit. The high payout ratio reflects our healthy balance sheet and positive outlook for cash flow generation over the next few years.
Himax Technologies, Inc. (NASDAQ:HIMX) is a fabless semiconductor company that specializes in display imaging processing technologies. It designs and sells critical components, such as display driver ICs and timing controllers that are essential for powering screens in consumer electronics, automotive displays, and augmented reality (AR) devices.
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