In this article, we will take a look at the 12 Best Semiconductor Equipment Stocks to Buy Right Now.
Artificial Intelligence’s technological requirements are driving a significant amount of investment and demand in the semiconductor industry. This is fueling the demand for the semiconductor equipment industry, as there is a need for new and advanced equipment to enhance chip production. According to McKinsey Global Institute, the semiconductor industry as a whole experienced a whopping economic profit growth, increasing from $38 billion in the 2008-09 period to $450 billion in the 2010-19 period. McKinsey sees semiconductors among the top industries poised to transform the future business landscape, with a projected value of between $1.7 trillion and $2.4 trillion by 2040.
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However, the recent tariff hurdles have been a growing concern for the semiconductor equipment manufacturers. Chip equipment makers are facing increasing risks in China as domestic rivals gain market share and demand trends start to shift. Barclays analyst Simon Cole expects China’s wafer front-end spending to drop 5% in 2025, followed by a 5% growth expected in 2026. However, the outlook is less supportive for Western suppliers.
“The addressable market for our coverage could decline 10-20% in 2025e and an additional 2-5% in 2026e, depending on export controls,” said Simon Coles.
Chinese manufacturers are focusing more on domestic tools instead of imported ones, with localization growing from mid-teens in 2023 to over 20% in 2024. Barclays noted that many Chinese semicap firms have announced a plethora of new tools coming to market. It will require some time to get verified and accepted, but within 1-2 years, Barclays anticipates Chinese local manufacturers to offer products that cover an even wider proportion of the market.
Export controls remain another major overhang for Western manufacturers. Barclays report notes that a quarter of China’s wafer front-end market could be localized in 2025, with 10% to 30% restricted, especially for the U.S. companies, more than for European or Japanese manufacturers. That leaves approximately 70% to 75% addressable market for Western players, a share Barclays expects to reduce further if restrictions widen.
“If export controls/entity lists are expanded, addressable wafer front-end in 2026e could decline >15% year-over-year – a very different outcome than what our 5% headline wafer front-end growth forecast suggests,” Barclays’ analysts noted.
The bank projects the U.S. addressable market could be 14% weaker in 2026 than industry forecasts, at $25 billion compared to $29 billion. China’s wafer front-end spending remains a key and more challenging picture for foreign suppliers.
With these market trends in mind, let’s turn to the 12 Best Semiconductor Equipment Stocks to Buy Right Now.
Our Methodology
To compile the list of 12 best semiconductor equipment stocks to buy right now, we shortlisted the semiconductor equipment companies from the Finviz screener. We then ranked these best semiconductor equipment stocks in ascending order of the number of hedge fund holders. The data for hedge funds is taken from Insider Monkey’s Hedge Fund database, updated as of Q2 2025.
Note: The data was recorded on August 29.
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).
12 Best Semiconductor Equipment Stocks to Buy Right Now
12. IPG Photonics Corp. (NASDAQ:IPGP)
Number of Hedge Fund Holders: 14
IPG Photonics Corp. (NASDAQ:IPGP) is one of the best semiconductor equipment stocks to buy right now. On August 27, IPG Photonics Corp. (NASDAQ:IPGP) reported that it will unveil the CROSSBOW MINI 3 kW high-energy laser system at Defence and Security Equipment International (DSEI) U.K.
IPG Photonics will reveal the new field-ready laser defence system for counter-UAS applications at DSEI U.K. from September 9 through September 12, 2025. The company’s CROSSBOW MINI is a patent-pending laser defence system that is engineered to counter the rising threat of unmanned aerial systems. The system is designed for immediate deployment and scalable integration, which marks IPG’s transformative leap in directed-energy defence.
IPG Photonics has successful field demonstrations, with 100 drones neutralized in realistic scenarios, including single and swarm attacks. CROSSBOW MINI is optimized to neutralize Group 1 and 2 drones with unmatched precision, and operate up to 12 hours on internal battery power, and for long missions with external power supplies.
Lockheed Martin has integrated the CROSSBOW MINI as the laser weapon system into its Sanctum C-UAS network.
“To address this need, Lockheed Martin developed the Sanctum C-UAS ecosystem with end-to-end capability to detect, track, identify, and defeat small UAS. Sanctum features a scalable, modular architecture, and these core design principles were proven during our recent integration with IPG’s CROSSBOW,” said Tyler Griffin, Lockheed Martin’s C-UAS Director.
IPG Photonics Corp. (NASDAQ:IPGP) designs and manufactures components used in its finished products, from semiconductor diodes to optical fiber preforms, finished lasers, and complementary products.
11. Photronics, Inc. (NASDAQ:PLAB)
Number of Hedge Fund Holders: 25
Photronics, Inc. (NASDAQ:PLAB) is one of the best semiconductor equipment stocks to buy right now. On August 28, D.A. Davidson reiterated a Buy rating on Photronics, Inc. (NASDAQ:PLAB), maintaining the price target of $30.
D.A. Davidson analyst Thomas Diffely kept the rating on PLAB following Q3 FY2025 results. The company posted $210 million in total revenue, surpassing the top end of expectations and remaining flat year-over-year. Photronics achieved adjusted EPS of $0.51, beating estimates by $0.13. The company’s cash flow represented 25% of revenue, contributing to a solid balance sheet with $576 million in cash and short-term investments.
Diffely remains positive on Photronics as the company reinvests in business expansion, leveraging its strong balance sheet. The company’s focus mainly remains in the U.S. and Asia to drive future revenue and earnings growth. During Q3, Photronics noted 14% year-over-year revenue growth in the flat panel display market, fueled by robust demand in Korea and China for advanced AMOLED technologies. For Q4, the company projects revenue of around $201 million and $209 million, while Wall Street, on average, expects revenue of $204.54 million.
Photronics, Inc. (NASDAQ:PLAB) is a leading manufacturer of photomasks, which are used to transfer circuit patterns onto semiconductor wafers and FPD substrates.
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