On Monday, October 13, semiconductor stocks bounced back to recover losses suffered on Friday. This performance was driven by OpenAI announcing a new deal with a major semiconductor company and tensions between the US and China easing a bit.
OpenAI and Broadcom Inc. (NASDAQ:AVGO) announced a strategic collaboration to develop custom artificial intelligence chips. OpenAI has also recently made deals with NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD).
Over the weekend, President Donald Trump posted on Truth Social and said it “will all be fine.” This eased some fears about China.
The VanEck Semiconductor ETF (NASDAQ:SMH) gained 4.43%, and many major semiconductor stocks went up as well.
Previously, on Friday, the markets were sent into a selloff after President Trump threatened big tariffs on China in response to China limiting exports of rare earth metals. He promised 100% tariffs on imports from China starting November 1 and said he would also restrict exports of “any and all critical software.”
With this background in mind, let’s take a look at the 11 best American semiconductor stocks to invest in.
Our Methodology
To compile our list of the 11 best American semiconductor stocks to invest in, we used stock screeners from Finviz and Yahoo Finance to look for semiconductor companies. We sorted our results based on market capitalization and picked the 30 largest American stocks. We also reviewed various financial media reports and online resources to compile our list of the best American stocks to buy in the semiconductor industry. Next, we focused on the top 11 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q2 2025 database of 983 elite hedge funds. Finally, the 11 best American semiconductor stocks to invest in were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q2 2025.
Why do we care about what hedge funds do? 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).
11 Best American Semiconductor Stocks to Invest In
11. Synopsys, Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 66
Synopsys, Inc. (NASDAQ:SNPS) is one of the best American stocks to buy in the semiconductor industry. On October 10, Synopsys, Inc. (NASDAQ:SNPS) shared that it has received approval from all necessary authorities to move forward with the planned sale of its Optical Solutions Group and PowerArtist businesses to Keysight Technologies.
Regulatory authorities required these divestitures as a necessary step as part of Synopsys, Inc.’s (NASDAQ:SNPS) acquisition of Ansys, which was completed on July 17, 2025.
According to the report by Synopsys, Inc. (NASDAQ:SNPS), these transactions are not material to the company’s financials. The company expects to conclude these sales on or about October 17, 2025.
Synopsys, Inc. (NASDAQ:SNPS) is an American company that provides tools and services for the design and manufacture of semiconductor chips and electronic systems. The company specializes in electronic design automation (EDA) tools, silicon intellectual property (IP), simulation and analysis solutions, and design services to help semiconductor and electronics industries design, verify, and manufacture chips and complex electronic systems.
10. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 76
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the best American stocks to buy in the semiconductor industry. On October 1, Stifel increased its price target on Marvell Technology, Inc. (NASDAQ:MRVL) from $80 to $95 while keeping a Buy rating.
Stifel highlighted that the company’s optical business has grown significantly since it acquired Inphi in 2021. Since the acquisition, Marvell Technology, Inc.’s (NASDAQ:MRVL) optical business has grown from about $800 million in annual revenue to a current run-rate of around $3 billion.
The research firm also pointed out that Marvell Technology, Inc.’s (NASDAQ:MRVL) acquisition of Innovium, which was announced in 2021, has been a success. This part of the business is now generating twice the initially expected $150 million in revenue. It is expected to grow further as 51.2T technology ramps up.
Marvell Technology, Inc.’s (NASDAQ:MRVL) custom silicon business is seeing solid engagement with design activity reaching all-time highs. There are over 50 new pipeline opportunities with various customers. Stifel estimates these represent about $75 billion in lifetime revenue potential.
Marvell Technology, Inc. (NASDAQ:MRVL) is an American company that develops and produces semiconductors and related technology for various applications, including AI, data centers, compute, networking, and storage infrastructure.
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