In this article, we will discuss: 11 Best Semiconductor Stocks with Huge Upside Potential.
Semiconductor stocks are shares of firms that manufacture or provide computer chips and microelectronic components. These chips drive modern technologies and electronics.
According to the Wall Street Journal, the U.S. government is debating a proposal that would mandate semiconductor companies to manufacture as many chips domestically as their clients import from abroad. Tariffs would be applied to businesses that were unable to sustain this 1:1 ratio over time. This action comes after President Donald Trump announced last month that his administration would impose around 100% tariffs on imported semiconductors, except for companies that currently produce in the United States or have committed to doing so. According to the Journal, Howard Lutnick, the Secretary of Commerce, has spoken with semiconductor entrepreneurs about the proposal and stressed that it might be necessary for “economic security.”
The initiative is intended to lessen reliance on foreign supply chains at a time when chip demand is increasing across industries. However, Reuters’ request for comment was not answered by the White House or the Commerce Department. Hence, it is unclear how the requirement and tariff enforcement will be carried out.
With that said, here are the 11 Best Semiconductor Stocks with Huge Upside Potential.
Our Methodology
For this article, we compiled an initial list of 11 Best Semiconductor Stocks. Then we selected the 13 stocks that had the highest upside potential as of September 12, 2025. We have only included stocks in our list with an upside potential of 13% or higher. The stocks are ranked in ascending order of upside potential. We have used the stock’s market cap as of September 22 as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
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).
11. Texas Instruments Incorporated (NASDAQ:TXN)
Analysts’ Upside Potential as of September 12: 13.14%
Market Cap as of September 22: $163.30 billion
Morgan Stanley reduced its price target for Texas Instruments Incorporated (NASDAQ:TXN) to $192 from $197 on September 12, maintaining an Underweight rating. The firm stated that the June quarter was “good overall” for analog semiconductor companies, but September-quarter outlooks “set a high bar” and outcomes “underwhelmed,” causing global analog equities to fall an average of 5% on earnings day.
The note pointed to a flat recovery slope at the end of the quarter, with more positive projections for the first half of 2026 and the December quarter. According to the analyst, restocking could result from historically low customer inventories, closing the present undershipping gap, and “offering potential upside to numbers.” Investors may need to wait for more definitive indications of continuous growth before sentiment toward Texas Instruments Incorporated (NASDAQ:TXN) and the larger analog semiconductor industry improves. Morgan Stanley’s cautious approach reflects short-term demand hurdles despite long-term prospects. It is one of the Stocks with Biggest Upside.
10. QUALCOMM Incorporated (NASDAQ:QCOM)
Analysts’ Upside Potential as of September 12: 13.14%
Market Cap as of September 22: $182.24 billion
QCraft has opened its European headquarters in Germany and partnered with QUALCOMM Incorporated (NASDAQ:QCOM) to expedite the implementation of next-generation intelligent driving solutions on the Snapdragon Ride™ platform.
Morningstar analysts predict that QUALCOMM Incorporated (NASDAQ:QCOM)’s licensing business (QTL) and chip business (QCT) will continue to generate strong cash flow, supporting the company’s narrow moat rating. This is projected to maintain the firm’s position as the market leader in 5G chipsets and intellectual property.
Apple’s move to replace QUALCOMM Incorporated (NASDAQ:QCOM) with its own baseband chips, or modems, will be a medium- to long-term obstacle but not a fatal blow. This is mainly due to the company being expected to expand in the automotive and Internet of Things semiconductor markets. The business has survived numerous government investigations and customer backlash in the licensing space. According to Morningstar analysts, QTL is expected to continue generating a steady flow of high-margin royalties in the future. It is among the Stocks with Biggest Upside.
9. NXP Semiconductors N.V. (NASDAQ:NXPI)
Analysts’ Upside Potential as of September 12: 14.39%
NXP Semiconductors N.V. (NASDAQ:NXPI) stated that its board had authorized an interim dividend of $1.014 per ordinary share for Q3 2025. The dividend will be paid in cash on October 8, 2025, to shareholders of record on September 17, 2025. The board expressed confidence in the company’s long-term growth and cash flow generation, as well as the stability of its capital structure.
NXP Semiconductors N.V. (NASDAQ:NXPI) operates in more than 30 countries and generated a revenue of $12.61 billion in 2024. The business provides solutions for the “Brighter Together” approach, which targets the automotive, industrial & IoT, mobile, and communications infrastructure markets. The dividend shows the firm’s focus on capital returns and conveys ongoing faith in its capacity to generate substantial cash flow. It is ranked ninth on our list of the Stocks with Biggest Upside.
8. NVIDIA Corporation (NASDAQ:NVDA)
Analysts’ Upside Potential as of September 12: 14.72%
RoboSense reported that the NVIDIA Corporation (NASDAQ:NVDA)’s NVIDIA DRIVE AGX platform is now compatible with its E1, EMX, and EM4 digital LiDARs. The collaboration offers OEMs high-definition 3D perception data to speed up the development, testing, and implementation of autonomous driving systems.
According to RoboSense’s CEO Mark Qiu, the combination of RoboSense LiDAR with NVIDIA Corporation (NASDAQ:NVDA)’s NVIDIA DRIVE would facilitate the quicker commercialization of intelligent vehicles like Robotaxi. RoboSense is the only firm that manufactures a >500-beam digital main LiDAR (EM4) and a fully solid-state blind-spot LiDAR (E1).
The EM4+E1 solution provides long-range precision and eliminates blind spots, making it the preferred choice for Robotaxi developers. RoboSense’s 520-beam LiDAR is already being included in next-generation ADAS by automakers such as Zeekr and IM. It is one of the Stocks with Biggest Upside.
7. Applied Materials, Inc. (NASDAQ:AMAT)
Analysts’ Upside Potential as of September 12: 17.55%
Applied Materials, Inc. (NASDAQ:AMAT) reported record-breaking Q3 FY2025 revenue of $7.30 billion, an 8% rise year on year. The operating margin was 30.6%, and the GAAP gross margin was 48.8%. Non-GAAP EPS reached a record $2.48, rising 17% year over year, while GAAP EPS was $2.22. Net income grew by 4% to $1.78 billion.
Applied Materials, Inc. (NASDAQ:AMAT)’s CEO, Gary Dickerson, stated that the company is on target to boost its sales for the sixth year in a row. However, he also noted that there is uncertainty due to macroeconomic and policy variables, such as demand from China. Brice Hill, the CFO, forecasted Q4 revenue of $6.7 billion ± $500 million and non-GAAP EPS of $2.11 ± $0.20, pointing to China’s capacity digestion and inconsistent demand from clients. Management stressed a stable supply chain, solid customer connections, and long-term confidence in semiconductor growth even with short-term challenges. It is among the Stocks with Biggest Upside.
6. Entegris, Inc. (NASDAQ:ENTG)
Analysts’ Upside Potential as of September 12: 18.74%
Entegris, Inc. (NASDAQ:ENTG) reported Q2 2025 net sales of $792.4 million, up 2% sequentially and above guidance. Non-GAAP diluted EPS was $0.66, whereas GAAP diluted EPS was $0.35, down from $0.41 in the previous quarter. The adjusted operating margin was 20.9%, the adjusted EBITDA was 27.3% of sales, and the gross margin was 44.4%. Net income dropped from $67.7 million to $52.8 million in the previous year.
CEO Bertrand Loy noted trade policy and macroeconomic uncertainties as factors affecting fab activity, but he credited growth to CMP consumables, selective etch, and deposition materials.
Entegris, Inc. (NASDAQ:ENTG) projects revenue of $780 million to $820 million for the third quarter. GAAP EPS of $0.43 to $0.50, and non-GAAP EPS of $0.68 to $0.75, which translates into an adjusted EBITDA margin of roughly 27.5% for the next quarter. Loy stated that the business is still optimistic about the long-term demand for semiconductors, pointing to its distinct materials science capabilities and AI-driven growth. It is among the Stocks with Biggest Upside.
5. Microchip Technology Incorporated (NASDAQ:MCHP)
Analysts’ Upside Potential as of September 12: 18.81%
Deca Technologies and Silicon Storage Technology® (SST®), a Microchip Technology Incorporated (NASDAQ:MCHP) subsidiary, have established a strategic collaboration to create a non-volatile memory chiplet package. The solution focuses on multi-die, modular systems.
The partnership unites SST’s SuperFlash® embedded flash technology with Deca’s M-Series™ fan-out and Adaptive Patterning®. The chiplet package combines physical design, redistribution layer (RDL) design rules, and interface logic. Deca’s ecosystem of partners will facilitate production, testing, and simulation.
Clients will receive assistance with everything from design to prototype manufacturing. The method expedites heterogeneous integration and shortens design cycles. Microchip Technology Incorporated (NASDAQ:MCHP)’s VP Mark Reiten stated that demand for chiplet-based solutions is growing as firms seek scalable, cost-efficient designs beyond Moore’s Law. It is ranked fifth on our list of the Stocks with Biggest Upside.
4. On Semiconductor Corporation (NASDAQ:ON)
Analysts’ Upside Potential as of September 12: 20.46%
On Semiconductor Corporation (NASDAQ:ON) announced $1.47 billion in revenue for the second quarter of 2025, with 37.6% GAAP and non-GAAP gross margins. The non-GAAP operating margin was 17.3%, whereas the GAAP operating margin was 13.2%. GAAP diluted EPS was $0.41, and non-GAAP EPS was $0.53. The business made $106.1 million in free cash flow and $184.3 million in operating cash flow, with share repurchases accounting for more than 100% of free cash flow so far this year.
According to CEO Hassane El-Khoury, the company’s continuous transformation is making its business model more predictable, and end markets are showing early indications of stabilization. Long-term growth positioning and short-term execution continue to be the main objectives. The goal of next-generation technology investments is to further strengthen On Semiconductor Corporation (NASDAQ:ON)’s market dominance and help in the recovery. Returning more than 100% of free cash flow to shareholders displays investor confidence in future performance. It is one of the Stocks with Biggest Upside.
3. Lam Research Corporation (NASDAQ:LRCX)
Analysts’ Upside Potential as of September 12: 23.68%
Lam Research Corporation (NASDAQ:LRCX) unveiled VECTOR® TEOS 3D, an entirely new deposition method designed to address complex packaging issues in the manufacturing of AI and high-performance computing chips. The system uses Lam Equipment Intelligence® technology and a unique bowed wafer handling technique to produce ultra-thick, void-free inter-die gapfill films up to 60 microns, with scalability beyond 100 microns. It allows single-pass deposition of crack-free films larger than 30 microns, considerably increasing yield. The quad station module architecture boosts throughput by approximately 70% while reducing the total cost of ownership by up to 20%.
Chipmakers are moving toward 3D stacking and chiplet architectures in an effort to further improve performance and space utilization due to the spike in demand for AI. These methods reduce yield by causing issues like wafer bow and film cracking. Lam Research Corporation (NASDAQ:LRCX)’s TEOS 3D tackles these difficulties with nanoscale precision, improved stability for thick wafers, and energy-efficient RF generators, allowing consistent production and enabling scalability beyond Moore’s Law. It is among the Stocks with Biggest Upside.
2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Analysts’ Upside Potential as of September 12: 36.00%
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest dedicated contract chip producer, or foundry, with a mid-60% market share in 2024. It uses its clients’ distinct IC designs to create integrated circuits for them. The shift of semiconductor companies worldwide from integrated device manufacturers to fabless designers has long benefited the firm. It assumes the costs and capital expenditures of operating factories in a highly cyclical market for its clients, just like all other foundries. Foundries frequently add too much capacity while demand is high, which can lead to underutilization during recessions and reduce profitability.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) should continuously generate higher gross margins than its rivals because of its economies of scale and premium pricing, which are supported by innovative process technologies. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the foundry leader, but each generation of process technology matures and commoditizes quickly, putting the company under pricing pressure. It is one of the Stocks with Biggest Upside.
1. Marvell Technology, Inc. (NASDAQ:MRVL)
Analysts’ Upside Potential as of September 12: 38.58%
Marvell Technology, Inc. (NASDAQ:MRVL) released record Q2 FY2026 net revenue of $2.006 billion, which was $6 million above guidance and a 58% year-over-year growth. Non-GAAP net income climbed to $585.5 million, or $0.67 per diluted share, while GAAP net income, or $0.22 per diluted share, reached $194.8 million. The non-GAAP gross margin was 59.4%, while the GAAP gross margin was 50.4%. The cash flow from operations reached $461.6 million. CEO Matt Murphy identified strong AI-driven demand for custom silicon and electro-optics solutions, as well as recovery in business networking and carrier infrastructure, as major growth drivers.
Marvell Technology, Inc. (NASDAQ:MRVL) anticipates Q3 FY2026 revenue of $2.060 billion, following the divestment of its Automotive Ethernet division earlier this month. The estimated non-GAAP operating expenses are approximately $485 million, while the non-GAAP gross margin is between 59.5% and 60.0%. Murphy stated that Marvell Technology, Inc. (NASDAQ:MRVL)’s custom AI design activity has reached an all-time high, with over 50 new engagements across more than ten customers, preparing the business for future profit and EPS growth.
While we acknowledge the potential of MRVL 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 MRVL and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. 11 Best Semiconductor Stocks with Huge Upside Potential is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
