In this article, we will list the 5 Semiconductor Stocks with Highest Upside Potential Right Now. Please visit 10 Semiconductor Stocks with Highest Upside Potential Right Now if you would like to see the extended list and the methodology behind it.

5. Astera Labs, Inc. (NASDAQ:ALAB)

Number of Hedge Fund Holders: 52

Upside Potential: 38.6%

Astera Labs, Inc. (NASDAQ:ALAB) is one of the best semiconductor stocks with the highest upside potential right now. Barclays lifted the price target on Astera Labs, Inc. (NASDAQ:ALAB) to $200 from $165 on May 7, maintaining an Equal Weight rating on the shares. The firm told investors in a research note that the company has several products ramping across its portfolio over the next two years, helped by broader AI data center networking demand.

The same day, Citi also lifted the price target on Astera Labs, Inc. (NASDAQ:ALAB) to $245 from $200 while maintaining a Buy rating on the shares. The firm cited the company’s “beat and raise” quarter for the target boost, telling investors in a research note that Scorpio is continuing to beat expectations.

The rating updates came after Astera Labs, Inc. (NASDAQ:ALAB) announced preliminary financial results for fiscal Q1 2026 on May 5, reporting record quarterly revenue of $308.4 million, up 14% quarter-over-quarter and up 93% year-over-year. The company stated that the market-leading PCIe 6 AI fabric and signal conditioning portfolio delivered strong growth during the quarter. GAAP gross margin was 76.3%, while GAAP operating income reached $61.8 million.

Astera Labs, Inc. (NASDAQ:ALAB) is a global semiconductor company that provides hardware and software solutions for AI and cloud infrastructure applications to solve memory, data, and networking bottlenecks. The company’s operations are divided into the following geographical segments: Taiwan, China, the United States, and Other.

4. Microchip Technology Incorporated (NASDAQ:MCHP)

Number of Hedge Fund Holders: 61

Upside Potential: 45.4%

Microchip Technology Incorporated (NASDAQ:MCHP) is one of the best semiconductor stocks with the highest upside potential right now. On May 11, Barclays lifted the price target on Microchip Technology Incorporated (NASDAQ:MCHP) to $105 from $80, keeping an Equal Weight rating on the shares. Microchip Technology Incorporated (NASDAQ:MCHP) also received a rating update from Raymond James on May 8, lifting 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.

Raymond James also believes that Microchip Technology Incorporated’s (NASDAQ:MCHP) differentiated exposure to datacenter and aerospace/defense end markets further bolsters its positioning for a stronger cyclical recovery with improving visibility into margin and earnings expansion over the coming quarters.

Microchip Technology Incorporated (NASDAQ:MCHP) provides semiconductor products. The company’s operations are divided into the Semiconductor Products and Technology Licensing segments.

3. Credo Technology Group Holding Ltd (NASDAQ:CRDO)

Number of Hedge Fund Holders: 69

Upside Potential: 22.29%

Credo Technology Group Holding Ltd (NASDAQ:CRDO) is one of the best semiconductor stocks with the highest upside potential right now. Rothschild & Co Redburn initiated coverage of Credo Technology Group Holding Ltd (NASDAQ:CRDO) with a Buy rating on May 1, setting a price target of $206. The firm told investors in a research note that the monetization of generative AI capex will require more intelligent large language models, and the transmission of electrical signals down copper wires will increasingly give way to the transmission of photonic signals down optical fibers.

It also believes the transition marks a new addressable market for optical networking companies, but noted that some of the opportunity has already been discounted by the market. Rothschild & Co Redburn launched the coverage of six names in the AI networking space with four Buys and two Neutrals. For additional reference, in its financial results for fiscal Q3 2026, Credo Technology Group Holding Ltd (NASDAQ:CRDO) reported revenue of $407.0 million, reflecting growth of 51.9% quarter over quarter and 201.5% year over year.

Credo Technology Group Holding Ltd (NASDAQ:CRDO) develops connectivity solutions and products for the data infrastructure market, with its products including integrated circuits, active electrical cables, and SerDes chiplets.

2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 224

Upside Potential: 25.5%

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the best semiconductor stocks with the highest upside potential right now. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) announced on May 15 plans to execute the sale of up to 152.0 million common shares of Vanguard International Semiconductor Corporation, or around 8.1% of VIS’ fully-diluted paid-in-capital, through a block trade to financial institutional investors. The company currently has around 27.1% of VIS shares on a fully diluted basis, and anticipates reducing its shareholding to around 19% upon the completion of this share sale.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) does not plan to sell more VIS shares in the foreseeable future and stated that the proposed share sale would not affect the strategic relations between the company and VIS, which includes the outsourcing of interposer production and licensing of GaN technology to VIS.

In a separate development, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and Sony Semiconductor Solutions Corporation announced on May 8 the signing of a non-binding memorandum of understanding to form a strategic partnership to develop and manufacture next-generation image sensors. The two companies aim to establish a joint venture under the proposed partnership to set up development and production lines in Sony’s newly constructed fab in Koshi City, Kumamoto Prefecture.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the largest contract semiconductor manufacturer in the world. Some of its prominent customers include semiconductor companies that outsource all or part of their chip production, including Advanced Micro Devices, Nvidia, Broadcom, and more.

1. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 264

Upside Potential: 39.6%

NVIDIA Corporation (NASDAQ:NVDA) is one of the best semiconductor stocks with the highest upside potential right now. TD Cowen lifted the price target on NVIDIA Corporation (NASDAQ:NVDA) to $275 from $235 on May 15, reiterating a Buy rating on the shares.

The rating update came as part of an off-cycle compute semiconductor earnings preview, with the firm telling investors in a research note that AI capex dollars are continually moving higher as investors seek the next “bottleneck” to infrastructure builds. It further stated that these circumstances have driven a “bifurcation within the infrastructure trade” as the largest accelerator companies underperform while optical names trade higher on expectations of coming shortages. The firm raised estimates citing ongoing momentum, adding that it now sees $1.3 trillion in data center silicon spending by 2030, up from the previous $1.2 trillion.

In a separate development, Cantor Fitzgerald lifted the price target on NVIDIA Corporation (NASDAQ:NVDA) to $350 from $300 on May 14, reiterating an Overweight rating on the shares.

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.

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