In this article, we will list the 5 Must-Buy Semiconductor Stocks to Invest In Now. Please visit 10 Must-Buy Semiconductor Stocks to Invest In Now if you would like to see the extended list and the methodology behind it.
5. nLIGHT, Inc. (NASDAQ:LASR)
Number of Hedge Fund Holders: 36
nLIGHT, Inc. (NASDAQ:LASR) is one of the top must-buy semiconductor stocks to invest in now. nLIGHT, Inc. (NASDAQ:LASR) received a rating update from Needham on May 8. The firm lifted the price target on the stock to $80 from $70, and reaffirmed a Buy rating on the shares. In a separate development, nLIGHT, Inc. (NASDAQ:LASR) announced on April 30 plans for the expansion of its existing operations in Torino, Italy, aimed at supporting the increased demand from European and allied customers for locally assembled directed energy solutions.
Management stated that the expanded Torino footprint is anticipated to improve the company’s ability to deliver high‑power laser subsystems and integrated directed energy components tailored to regional operational needs, while simultaneously aligning with European localization, security, and supply‑chain resiliency requirements. It added that the project builds on nLIGHT, Inc.’s (NASDAQ:LASR) established presence in Italy, and also highlights its long-term commitment to support allied defense and security users with mission‑ready laser technology.
nLIGHT, Inc. (NASDAQ:LASR) provides semiconductor and fiber lasers for aerospace and defense, microfabrication, and industrial applications. The company operates through the Laser Products and Advanced Development segments.
4. Tower Semiconductor Ltd. (NASDAQ:TSEM)
Number of Hedge Fund Holders: 46
Tower Semiconductor Ltd. (NASDAQ:TSEM) is one of the top must-buy semiconductor stocks to invest in now. Wedbush lifted the price target on Tower Semiconductor Ltd. (NASDAQ:TSEM) to $300 from $140 on May 14, reiterating a Neutral rating on the shares. The firm stated that it sees the company’s fiscal Q1 results and commentary as positive. It also very much acknowledges that it missed the velocity of the ongoing transition to optical datacenter networking when it made the decision to move to a Neutral view on the stock late last year.
The rating update came after Tower Semiconductor Ltd. (NASDAQ:TSEM) announced on May 13 the signing of Silicon Photonics (SiPho) contracts for $1.3 billion for 2027 revenue with its largest customers, along with the receipt of $290 million in customers’ prepayments for capacity reservation. Management stated that the initial commitment is further reinforced by an even larger contractual wafer commitment for 2028, with additional associated prepayments due by January 2027. It also stated that the long-term agreements bolster the company’s strategic position in the rapidly expanding optical connectivity market.
Tower Semiconductor Ltd. (NASDAQ:TSEM) provides semiconductor solutions. The company’s offerings also include technology and manufacturing platforms for integrated circuits (ICs) in growing markets, such as automotive, consumer, industrial, medical, mobile, infrastructure, and aerospace and defense.
3. Monolithic Power Systems, Inc. (NASDAQ:MPWR)
Number of Hedge Fund Holders: 50
Monolithic Power Systems, Inc. (NASDAQ:MPWR) is one of the top must-buy semiconductor stocks to invest in now. Needham lifted the price target on Monolithic Power Systems, Inc. (NASDAQ:MPWR) to $1,750 from $1,300 on May 1, maintaining a Buy rating on the shares. The firm told investors in a research note that the company reported a solid beat and raise, supported by growth in the Enterprise Data and Communications segments.
Monolithic Power Systems, Inc. (NASDAQ:MPWR) also received a rating update from Truist on May 1. The firm raised the price target on the stock to $1,805 from $1,396 while maintaining a Buy rating on the shares. It told investors in a research note that the company’s fiscal Q1 results surpassed estimates, while fiscal Q2 was guided meaningfully above consensus. It added that growth remains diversified, but the clear driver continues to be data centers/AI, which is shown in both the Enterprise Data & Comms end markets.
Monolithic Power Systems, Inc. (NASDAQ:MPWR) is involved in the design, development, and marketing of integrated power semiconductor solutions and power delivery architectures for computing and storage, industrial, automotive, communications, and consumer applications markets.
2. Microchip Technology Incorporated (NASDAQ:MCHP)
Number of Hedge Fund Holders: 61
Microchip Technology Incorporated (NASDAQ:MCHP) is one of the top must-buy semiconductor stocks to invest in now. UBS lifted the price target on Microchip Technology Incorporated (NASDAQ:MCHP) to $130 from $115 on May 8, reiterating a Buy rating on the shares. Microchip Technology Incorporated (NASDAQ:MCHP) also received a rating update from Raymond James the same day. The firm raised the price target on the stock to $125 from $90 while maintaining a Strong Buy rating on the shares.
The firm told investors in a research note that the quarter showed continued recovery, with inventory reductions across internal channels, distributors, and customers, along with declining underutilization charges and extending lead times that point towards improving demand consistent with broader analog industry trends. It further stated that although operating expenses are anticipated to increase as incentives normalize, gross margin expansion is expected to more than offset this, which would support EPS growth.
In a separate development, Barclays lifted the price target on Microchip Technology Incorporated (NASDAQ:MCHP) to $105 from $80 on May 11, keeping an Equal Weight rating on the shares.
Microchip Technology Incorporated (NASDAQ:MCHP) provides semiconductor products. The company’s operations are divided into the Semiconductor Products and Technology Licensing segments.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 264
NVIDIA Corporation (NASDAQ:NVDA) is one of the top must-buy semiconductor stocks to invest in now. NVIDIA Corporation (NASDAQ:NVDA) released financial results for fiscal Q1 2027 on May 20, reporting record revenue of $81.6 billion for the quarter, up 20% from the previous quarter and up 85% from a year ago. GAAP and non-GAAP gross margins were 74.9% and 75.0% for the quarter, respectively, while GAAP and non-GAAP earnings per diluted share were $2.39 and $1.87, respectively.
NVIDIA Corporation (NASDAQ:NVDA) further reported that the company returned a record level of around $20.0 billion in fiscal Q1 2027 in the form of shares repurchased and cash dividends. It had 38.5 billion remaining under its share repurchase authorization as of the end of the quarter. The company’s Board of Directors also approved an additional $80.0 billion to its share repurchase authorization on May 18, 2026, without expiration. NVIDIA Corporation (NASDAQ:NVDA) is also increasing its quarterly cash dividend from $0.01 per share to $0.25 per share of common stock, payable on June 26, 2026, to all shareholders of record on June 4, 2026.
NVIDIA Corporation (NASDAQ:NVDA) designs and manufactures computer graphics processors, chipsets, and other multimedia software. It operates in the Compute & Networking and Graphics Processing Unit (GPU) segments.
While we acknowledge the potential of NVDA 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 NVDA and that has 100x upside potential, check out our report about the cheapest AI stock.
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