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.
While we acknowledge the potential of AMAT 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 AMAT and that has 100x upside potential, check out our report about the cheapest AI stock.
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