Global semiconductor sales are picking up real steam, and it’s starting to feel like the industry is firmly back on an upward track. In April 2025, chip sales reached $57 billion, according to the Semiconductor Industry Association, a solid 2.5% increase from March and a massive 22.7% jump compared to April last year. It’s the first month this year to show sequential growth, and that’s no small detail. It signals not just a rebound, but a broader resurgence driven by rising demand across several high-growth sectors, especially artificial intelligence, cloud computing, and next-gen consumer tech.
The rebound isn’t isolated to one part of the world, either. Sales in the Americas surged by more than 44% year-over-year, Asia-Pacific saw a 23% gain, and even China, despite geopolitical headwinds, posted a 14.4% increase. Supply chains are stabilizing, capital spending is ramping up, and new product cycles are breathing fresh life into the market.
All of these points to one thing: the semiconductor sector is entering a new phase of growth. And within this broader rally, some companies are emerging as clear winners, poised to benefit the most from rising global demand and a renewed wave of innovation.
Our Methodology
To identify the 10 must-buy semiconductor stocks, we started by exploring the broader universe of companies in the semiconductor sector. We analyzed our internal rankings, reviewed insights from financial media and examined relevant ETFs to narrow down the list. From there, we focused on the stocks most favored by institutional investors. We used hedge fund sentiment data from Insider Monkey’s Q1 2025 database, which tracks the holdings of 1,000 top-tier hedge funds. Finally, we ranked the 10 selected stocks in ascending order based on how many hedge funds held positions in each as of Q1 2025
Note: All data was recorded on July 25, 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Must-Buy Semiconductor Stocks to Invest in
10. GlobalFoundries Inc. (NASDAQ:GFS)
Number of Hedge Fund Holders: 31
GlobalFoundries Inc. (NASDAQ:GFS) is one of the must-buy semiconductor stocks to invest in. GlobalFoundries Inc. (NASDAQ:GFS) has announced its plan to acquire MIPS, a move aimed at significantly boosting its AI and computing capabilities. This acquisition marks a strategic step for GlobalFoundries as it seeks to expand its technology portfolio and better position itself in the rapidly evolving semiconductor landscape. By integrating MIPS’ advanced processor architecture, GlobalFoundries aims to enhance its ability to deliver high-performance solutions tailored to AI workloads and next-generation computing demands.
MIPS, known for its RISC-based CPU designs, brings decades of innovation and a strong intellectual property portfolio to the table. This deal is expected to accelerate GlobalFoundries’ development of energy-efficient, scalable processors, addressing the growing need for specialized chips in data centers, edge computing, and AI applications. As demand for AI-driven hardware intensifies, semiconductor manufacturers are racing to offer more powerful and efficient solutions, and this acquisition aligns with that trend.
Industry observers see this move as part of a broader shift, where foundries are not just manufacturing centers but also active participants in chip design and innovation. With MIPS’ expertise, GlobalFoundries is poised to strengthen its competitive edge, opening new avenues for growth and collaboration. The acquisition underscores GlobalFoundries’ commitment to investing in technology that meets the rising computational demands of the future.
9. MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI)
Number of Hedge Fund Holders: 36
MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) is one of the must-buy semiconductor stocks to invest in. Macom Technology Solutions Holdings, Inc. (NASDAQ: MTSI) received a fresh vote of confidence from Stifel, which raised its price target on the stock to $155 from $140 while reiterating a Buy rating. Based on the current market price of $137.10, the new target implies an upside of approximately 13%. Stifel’s updated view reflects growing optimism that the protracted inventory correction across the semiconductor sector may have finally reached its end, setting the stage for a broader cyclical rebound, even if the timing and strength of that recovery remain difficult to predict.
In its note, the firm highlighted its preference for semiconductor companies with direct exposure to AI infrastructure, where demand trends continue to outpace the rest of the market. Macom, with its focus on high-performance analog RF, microwave, and photonic semiconductors, stands to benefit from increased investment in data center and 5G infrastructure, both of which are deeply tied to the AI buildout.
While Stifel stopped short of forecasting a sharp near-term rebound, it pointed to expected median revenue growth of 32% in 2025 and 17% in 2026 for AI-oriented chipmakers under its coverage. For investors eyeing high-quality plays on secular growth in connectivity and AI, Macom remains firmly on the radar.
8. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 73
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the must-buy semiconductor stocks to invest in. Marvell Technology, Inc. (NASDAQ:MRVL) is emerging as a standout semiconductor name heading into earnings season, buoyed by persistent demand for AI infrastructure and high-speed connectivity. J.P. Morgan analyst Harlan Sur reaffirmed an Overweight rating on the stock, placing it alongside NVIDIA Corporation (NASDAQ:NVDA) and Broadcom Inc. (NASDAQ:AVGO) as one of his top AI-related picks. Unlike many chipmakers tethered to consumer cycles, Marvell is deeply entrenched in the backbone of AI compute, particularly in optical connectivity, which has become critical for hyperscale data center operations.
Sur noted that AI workloads are pushing the limits of current data infrastructure, creating sustained demand for faster networking and higher bandwidth. This environment plays directly into Marvell’s strengths, as the company provides key components for linking AI accelerators across massive compute clusters. The analyst emphasized that Marvell is well-positioned to weather macroeconomic headwinds, including potential trade or tariff disruptions, thanks to its role in essential data movement technology.
While Nvidia continues to dominate AI headlines, Marvell’s under-the-radar contributions to the AI buildout may offer an attractive opportunity for those seeking exposure to infrastructure-driven growth in the semiconductor space.
7. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 79
Analog Devices, Inc. (NASDAQ:ADI) is one of the must-buy semiconductor stocks to invest in. Morgan Stanley has raised its price target on Analog Devices, Inc. (NASDAQ:ADI) to $273 from $212, maintaining a bullish stance on the semiconductor company. With the current market price at $236.70, this revised target implies an upside of approximately 15%. The upgrade reflects growing confidence in Analog Devices’ ability to capitalize on the expanding demand for high-performance analog and mixed-signal chips, which are critical components in a wide array of applications including automotive, industrial automation, and 5G infrastructure.
Morgan Stanley’s positive outlook is driven by Analog Devices’ strong product portfolio and strategic investments in emerging technologies. The company’s focus on precision data conversion and signal processing positions it well to benefit from increasing adoption of advanced sensor technologies and the push toward electrification across multiple industries. Additionally, Analog Devices’ robust balance sheet and consistent cash flow generation provide the financial flexibility to pursue growth opportunities and navigate supply chain challenges.
The analyst also highlighted the company’s resilience amid the broader semiconductor cycle, noting that Analog Devices’ diverse end-market exposure helps mitigate volatility. As industries continue to integrate more sophisticated analog components to support AI, IoT, and smart devices, Analog Devices is expected to maintain steady growth. Morgan Stanley’s revised target underscores the belief that the stock remains undervalued relative to its long-term potential in a technology-driven market.
6. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 80
ASML Holding N.V. (NASDAQ:ASML) is one of the must-buy semiconductor stocks to invest in. ASML Holding N.V. (NASDAQ:ASML) received a Hold rating from Kempen & Co, which also raised its price target to €700, roughly $761 for U.S. shares, implying about 8% upside from the current price of $704.78. While the downgrade signals some near-term caution, the revised target reflects continued confidence in ASML’s strategic positioning and long-term growth potential.
The call comes shortly after ASML reported quarterly earnings that fell short of expectations, driven by weaker order intake and softer near-term demand. However, the results are widely seen as reflective of cyclical timing rather than any erosion of ASML’s core competitive edge. As the world’s sole supplier of extreme ultraviolet (EUV) lithography machines, ASML remains central to the most advanced semiconductor manufacturing processes.
Despite near-term headwinds, the company is poised to benefit from structural tailwinds in AI, high-performance computing, and global re-shoring of chip production. With leading foundries like TSMC and Intel continuing to ramp up capacity for next-generation nodes, ASML’s tools will remain indispensable. For investors with a long-term view, the stock still represents a unique and essential exposure to the technological backbone of the semiconductor industry.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 82
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the must-buy semiconductor stocks to invest in. UBS has increased its price target for QUALCOMM Incorporated (NASDAQ:QCOM) to $165 from $145 while maintaining a Neutral rating on the stock. With the current market price at $157.90. The adjustment comes ahead of Qualcomm’s Q3 earnings, where UBS expects a modest positive bias driven by tariff-related pull-ins affecting both Android and Apple devices.
The analyst points out that while the recent quarter shows encouraging signs due to accelerated shipments prompted by trade uncertainties, this boost is unlikely to continue into the latter half of the year. The underlying demand for smartphones and PCs remains sluggish, and end-consumer spending has yet to show significant improvement. As a result, the temporary surge from tariff-related factors may fade, creating headwinds for sustained growth.
Despite this cautious outlook, Qualcomm’s strong position in 5G technology and its diversified product portfolio continue to make it a key player in the semiconductor space. UBS highlights that, although near-term momentum may soften, Qualcomm’s long-term prospects tied to emerging technologies and connectivity trends remain intact. Investors may want to weigh the short-term challenges against the company’s potential to benefit from broader technological shifts in the future.
4. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 83
Applied Materials, Inc. (NASDAQ:AMAT) is one of the must-buy semiconductor stocks to invest in. Applied Materials (NASDAQ: AMAT) received an upward revision from Needham, which raised its price target on the stock to $240 from $195 while maintaining a Buy rating. Based on the current share price of $188.20, the new target suggests an implied upside of roughly 28%, signaling renewed confidence in the company’s positioning as demand trends stabilize across the semiconductor equipment landscape.
The adjustment comes amid growing visibility into wafer fab equipment (WFE) spending, which appears to be recovering after a challenging downcycle. Needham’s move reflects a view that Applied’s backlog strength and exposure to leading-edge logic and memory customers place it in a favorable position as capital spending resumes, particularly in the U.S. and Asia. The company’s role in enabling advanced process nodes, especially in AI and high-performance computing applications, is seen as a differentiator.
Applied Materials has also benefited from increased government and private investment into domestic chip manufacturing, an area expected to drive longer-term upside. With margins holding steady and order activity improving, the firm believes current levels offer an attractive entry point. As one of the few players with end-to-end scale in semiconductor fabrication tools, Applied remains well aligned with both near-term demand normalization and multi-year strategic shifts in global chip production.
3. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 96
Micron Technology, Inc. (NASDAQ:MU) is one of the must-buy semiconductor stocks to invest in. Arete Research has lifted its price target on Micron Technology, Inc. (NASDAQ:MU) to $150 from $145 while reiterating a Buy rating on the stock. Based on the current trading price of $108.30, the new target suggests an implied upside of roughly 38%, underscoring growing optimism around the memory chipmaker’s role in the AI and data center boom.
The revised forecast comes amid a broader re-rating of memory stocks, as market dynamics continue to shift in favor of high-bandwidth memory (HBM) and next-generation DRAM technologies. Micron has secured a critical position in this trend with its HBM3E chips, which are increasingly being used to support AI training and inference workloads. As hyperscale customers ramp up deployments of AI infrastructure, Micron stands to benefit from both volume growth and higher average selling prices.
Arete’s updated target reflects not only near-term momentum but also improving supply-demand conditions across the memory market. Inventory levels have been normalizing, and pricing power is gradually returning to suppliers, providing a tailwind for margins in upcoming quarters. While the stock has already enjoyed a strong run over the past year, analysts see further room to climb as AI continues to reshape the semiconductor industry and drive secular demand for advanced memory solutions.
2. Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM)
Number of Hedge Fund Holders: 187
Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is one of the must-buy semiconductor stocks to invest in. Morgan Stanley has raised its price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to NT$1,388 from NT$1,288, reflecting optimism around the chipmaker’s pricing power and growth trajectory. When translated to U.S. dollar terms, the new target equates to approximately $259 per share, implying a potential upside of about 10% from the current U.S.-listed ADR price of $235.02. The firm maintains an Overweight rating on the stock.
Driving the improved outlook is TSMC’s anticipated 3% to 5% wafer price increase, a move supported by persistent demand for advanced chips and adverse foreign exchange dynamics. Morgan Stanley believes this adjustment could push TSMC’s gross margins well above the company’s stated goal of “53% and higher” for the coming year, signaling stronger-than-expected profitability.
Adding to the positive momentum is the resumption of Nvidia’s H20 chip shipments to China, which could materially benefit TSMC, given the size and relevance of the Chinese AI market. These GPU orders alone are expected to account for 2%–3% of TSMC’s revenue in 2025. Separately, the company’s planned $165 billion investment in U.S.-based manufacturing facilities may also improve its positioning in ongoing trade and tariff discussions, potentially bolstering its competitiveness in North America.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 212
NVIDIA Corporation (NASDAQ:NVDA) is one of the must-buy semiconductor stocks to invest in. NVIDIA Corporation (NASDAQ: NVDA) has already cemented its status as the world’s most valuable company, riding the AI boom to new heights. Yet, the growth story is far from over, with demand for its chips accelerating and fresh AI applications just beginning to take shape.
Citigroup analyst Atif Malik recently raised his outlook on the total addressable market (TAM) for data center AI chips to $563 billion by 2028, a 13% increase from his previous estimate. This upward revision is largely driven by stronger-than-expected demand from sovereign AI initiatives, which are contributing billions in sales today and are expected to expand further with upcoming AI factory buildouts.
Malik notes that Nvidia is deeply involved in nearly every sovereign AI deal, projecting tens of gigawatts of enterprise and sovereign AI factory installations over the next few years. While compute remains the primary growth driver, networking is also becoming increasingly important. Malik raised the networking TAM forecast by 32% to $119 billion, citing larger AI training clusters and more intensive inference workloads as key factors. Networking is expected to account for about 21% of the data center semiconductor TAM, up from 18%.
Reflecting these trends, Malik lifted his price target on Nvidia shares from $180 to $190. With a broad analyst consensus backing the stock, Nvidia remains a standout in the evolving AI semiconductor landscape.
While we acknowledge the risk and potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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