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.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 76
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the best American stocks to buy in the semiconductor industry. On October 7, QUALCOMM Incorporated (NASDAQ:QCOM) announced its agreement to acquire Arduino, an Italian open-source hardware and software company.
This deal will help QUALCOMM Incorporated (NASDAQ:QCOM) support developers by providing access to an unmatched portfolio of edge technologies and products.
This acquisition follows QUALCOMM Incorporated’s (NASDAQ:QCOM) recent integrations of Edge Impulse and Foundries.io. These moves show that the company is committed to offering a full-stack edge platform that includes hardware, software, and cloud services.
With an aim to boost developer productivity across different industries, QUALCOMM Incorporated (NASDAQ:QCOM) will be looking to combine its leading‑edge processing, graphics, computer vision, and AI with Arduino’s community and easy-to-use and affordable tools.
Nakul Duggal, Group General Manager for Automotive, Industrial, and Embedded IoT at QUALCOMM Incorporated (NASDAQ:QCOM), said:
“With our acquisitions of Foundries.io, Edge Impulse, and now Arduino, we are accelerating our vision to democratize access to our leading‑edge AI and computing products for the global developer community.”
QUALCOMM Incorporated (NASDAQ:QCOM) is an American multinational corporation that creates semiconductors, software, and services related to wireless technology. Its portfolio includes products for processors, modems, platforms, RF systems, and connectivity.
8. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 79
Analog Devices, Inc. (NASDAQ:ADI) is one of the best American stocks to buy in the semiconductor industry. On September 30, Cantor Fitzgerald increased its price target on Analog Devices, Inc. (NASDAQ:ADI) from $270 to $300 while maintaining an Overweight rating.
The firm’s analyst noted that even though overall demand is still subdued, customer confidence within the analog semiconductor sector is improving.
Cantor Fitzgerald is also seeing more positive sentiment around positive cyclical trends and clearer outlooks for the year 2026.
Analog Devices, Inc. (NASDAQ:ADI) is an American multinational semiconductor company that designs and manufactures analog, mixed signal, and digital signal processing integrated circuits.
7. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 81
Applied Materials, Inc. (NASDAQ:AMAT) is one of the best American stocks to buy in the semiconductor industry. On October 3, Bernstein reiterated its Outperform rating on Applied Materials, Inc. (NASDAQ:AMAT) and kept the price target at $195.
This decision came after Applied Materials, Inc. (NASDAQ:AMAT) said in a filing that a new US rule would hurt its financial performance. The rule makes it difficult to export some products and provide certain parts and services to select customers in China without getting a license.
The US has expanded its list of export restrictions to include majority-owned subsidiaries of listed companies. This rule aims to target firms in China and other countries that try to avoid US export limits by using affiliates.
Applied Materials, Inc. (NASDAQ:AMAT) expects an impact of about $110 million in its fiscal fourth quarter and forecasts a bigger hit of $600 million on its fiscal year 2026 results.
Despite this new challenge, Bernstein kept its Outperform rating on Applied Materials, Inc. (NASDAQ:AMAT).
Applied Materials, Inc. (NASDAQ:AMAT) is an American corporation that specializes in materials engineering solutions for the semiconductor and flat panel display industries.
6. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 82
Intel Corporation (NASDAQ:INTC) is one of the best American stocks to buy in the semiconductor industry. On October 2, Bernstein reiterated its Market Perform rating on Intel Corporation (NASDAQ:INTC) with a price target of $21.
This decision came after a report from Semafor, which said that Intel Corporation (NASDAQ:INTC) is in early talks to possibly add Advanced Micro Devices, Inc. (AMD) as a foundry customer.
However, Bernstein pointed out that the report offered very limited details about what this potential deal could look like and how much of AMD’s manufacturing could move to Intel Corporation (NASDAQ:INTC) if a deal is made, or if the agreement would include a direct investment.
The research firm also said it is still possible that no deal will happen between Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (AMD).
Bernstein continues to believe that Intel Corporation (NASDAQ:INTC) faces serious challenges. However, the firm cautioned about shorting the stock because of headline risk, noting that “more volatility remains in store for the shares.”
Intel Corporation (NASDAQ:INTC) is an American company that manufactures central processing units (CPUs) and semiconductors.
5. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 85
Lam Research Corporation (NASDAQ:LRCX) is one of the best American stocks to buy in the semiconductor industry. On September 30, HSBC began covering Lam Research Corporation (NASDAQ:LRCX), giving the stock a Hold rating and setting the price target at $127.
HSBC pointed out that Lam Research Corporation (NASDAQ:LRCX) is expected to benefit from growing demand for wafer fabrication equipment.
The research firm expects Lam Research Corporation (NASDAQ:LRCX) to achieve a compound annual growth rate of 15.7% in diluted EPS from fiscal years 2025 to 2030.
However, HSBC cautioned that near-term revenue growth could slow down. This is because growth in wafer fab equipment spending is expected to be sluggish because of tough comparisons in the foundry and NAND end markets.
The firm also noted that Lam Research Corporation (NASDAQ:LRCX) gained more than 30% in September, which suggests that the stock’s price may already reflect much of the expected gains.
Lam Research Corporation (NASDAQ:LRCX) is a global supplier of wafer fabrication equipment and services to the semiconductor industry.
4. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 94
Micron Technology, Inc. (NASDAQ:MU) is one of the best American stocks to buy in the semiconductor industry. On October 6, Morgan Stanley upgraded its rating on Micron Technology, Inc. (NASDAQ:MU) from Equalweight to Overweight and increased its price target from $160 to $220.
This decision by the firm comes as momentum in core DRAM pricing continues to surpass expectations.
Morgan Stanley’s DRAM and NAND channel checks suggest that buyers are worried about product availability throughout 2026 as there is strong demand for servers and storage solutions. The firm believes that supply may be tight for several quarters.
The firm pointed out that server memory, including DDR5 server solutions, is expected to see price increases by double digits in both the fourth quarter of 2024 and the first quarter of 2025. This means that current forecasts are likely conservative.
Despite Micron Technology, Inc. (NASDAQ:MU) performing well, Morgan Stanley believes there is room for further upside.
Micron Technology, Inc. (NASDAQ:MU) is a leading semiconductor technology company that is known for its innovative memory and storage solutions. The company offers a portfolio of high-performance DRAM, NAND, and NOR memory and storage products.
3. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 113
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the best American stocks to buy in the semiconductor industry. On October 7, Goldman Sachs kept its price target of $210 and Neutral rating on Advanced Micro Devices, Inc. (NASDAQ:AMD).
This decision came after Advanced Micro Devices, Inc. (NASDAQ:AMD) announced a strategic partnership with OpenAI, which involves OpenAI deploying 6 gigawatts of AMD GPUs over the coming years.
The deal includes performance-based warrants, which will allow OpenAI to own up to 160 million shares of Advanced Micro Devices, Inc. (NASDAQ:AMD), roughly 10% of the company.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is expected to benefit from this partnership and grow its revenue and non-GAAP EPS.
Goldman Sachs sees the announcement as “a substantial positive for AMD.” However, the firm maintained its Neutral rating and cited “potential funding risks tied to the business and likely high customer concentration for AMD’s GPU datacenter business.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company that manufactures graphics processing units (GPUs), microprocessors, and high-performance computing solutions and serves a number of high-growth industries like gaming, data centers, and AI.
2. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO) is one of the best American stocks to buy in the semiconductor industry. On October 8, Broadcom Inc. (NASDAQ:AVGO) reported that it will be presenting significant advancements in its scale-up and scale-out AI networking solutions at the 2025 Open Compute Project (OCP) Global Summit, which is taking place in San Jose from October 13 to 16.
According to the report, Broadcom Inc. (NASDAQ:AVGO) will showcase several innovations including the Tomahawk 6, Tomahawk Ultra, and Jericho4 Ethernet switches. The company will also show its third-generation TH6-Davisson Co-packaged Optics (CPO).
Broadcom Inc.’s (NASDAQ:AVGO) Tomahawk 6 and Jericho4 switches offer the power and capacity required for massive AI fabrics. The Tomahawk Ultra delivers ultra-low latency switching for high-performance scale-up domains. Broadcom Inc.’s (NASDAQ:AVGO) third-generation co-packaged optics Ethernet switch, TH6-Davisson, complements these solutions by enhancing end-to-end link reliability and reducing power.
Together, these solutions offer an end-to-end platform for AI infrastructure that meets the exponential bandwidth demands of modern AI workloads.
Broadcom Inc. (NASDAQ:AVGO) is an American multinational technology company that designs, develops, and supplies a wide range of semiconductor, enterprise software, and security solutions.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
NVIDIA Corporation (NASDAQ:NVDA) is one of the best American stocks to buy in the semiconductor industry. On October 8, Bloomberg News reported that the US has approved the export of several billion dollars’ worth of NVIDIA Corporation (NASDAQ:NVDA) chips to the United Arab Emirates (UAE).
This approval supports a positive outlook for NVIDIA Corporation (NASDAQ:NVDA). The deal will support the construction of data centers in the UAE, which are important for developing AI models.
While citing people familiar with the matter, the report said that the Commerce Department’s Bureau of Industry and Security granted export licenses to NVIDIA Corporation (NASDAQ:NVDA) after the UAE made solid plans to make a reciprocal amount of investment in the US. These licenses are part of a bilateral AI agreement made in May.
Reuters reported in May that the US and the UAE have a preliminary agreement that allows the UAE to import 500,000 of NVIDIA Corporation’s (NASDAQ:NVDA) most advanced AI chips per year, starting in 2025. This agreement lasts at least until 2027 and there is a chance it could extend until 2030.
NVIDIA Corporation (NASDAQ:NVDA) is an American multinational technology company that manufactures graphics processing units (GPUs), AI hardware and software, and high-performance computing (HPC) solutions.
While we acknowledge the potential of NVDA as an investment, 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 a 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
