Top 2025 Semiconductor Trades: Buy NVIDIA & TSM, Skip AMD

In 2025, the global semiconductor market is positioned to expand, igniting enthusiasm among market participants. Notably, a couple of semiconductor stocks — NVIDIA Corporation NVDA and Taiwan Semiconductor Manufacturing Company Limited TSM, or TSMC — have seen substantial gains for quite some time, but Advanced Micro Devices, Inc. AMD has had a terrible run. Let’s, thus, see how investors should bet on these three companies –Semiconductor – A Growing Market in 2025The increase in demand for Internet of Things (IoT) devices, digitalization of economies, and heavy investments in semiconductor manufacturing hubs are expected to help the semiconductor market expand this year and beyond. According to Statista, revenues from the semiconductor markets worldwide are estimated to reach $702.40 billion in 2025, up from $607.41 billion last year. Revenues are projected to reach $980.80 billion by 2029 at a CAGR of 8.70%. The integrated circuits market will drive revenues, followed by discrete semiconductors, optoelectronics, and sensors and actuators.Semiconductor stocks have already begun to gain momentum this year, with the iShares Semiconductor ETF SOXX gaining 9.2% year to date after advancing 12.2% last year.2 Semiconductor Stocks to Invest in: NVIDIA & TSMCSOXX’s top holdings, NVIDIA and TSMC, have been performing well and are poised for further growth in the semiconductor market. Strong demand for NVIDIA’s newer and older chips is expected to drive its share prices higher. Shipments for the new generation cutting-edge Blackwell chips have surged this quarter due to their enhanced energy efficiency and 30 times faster AI interface than older chips. At the same time, CEO Jensen Huang confirmed that the demand for the older Hopper chips remains steady due to its superior quality compared to rival Intel Corporation INTC.NVIDIA’s dominant global market share in the graphic processing units (GPU) space provides a competitive advantage, which bodes well for its shares. This is because the GPU market worldwide is estimated to increase to $101.54 billion in 2025 from $75.77 billion in 2024, added Precedence Research. With NVIDIA’s shares poised to climb, it’s smart to consider buying the NVDA stock now. NVIDIA currently has a Zacks Rank #2 (Buy) and the $2.94 Zacks Consensus Estimate for NVDA’s earnings per share (EPS) is up 46.3% from a year ago (read more: 2 AI Stocks to Buy for Potential 2025 Gains: NVIDIA & Palantir).  Image Source: Zacks Investment ResearchTSMC’s dominance in the global foundry market, meanwhile, is expected to boost its stock performance. The uptick in demand for TSMC’s custom artificial intelligence (AI) chips among the likes of Broadcom Inc. AVGO has bolstered its future growth. The increase in pre-order demand for the highly anticipated TSMC’s 2-nanometer (nm) chips this year is also expected to boost the TSMC stock. Its demand has exceeded that of the existing 3 and 5nm chips.With the TSMC stock likely to rise, it surely is a must-buy as well. TSMC presently has a Zacks Rank #2 and its EPS is estimated to increase by 21% from last year. The Zacks Consensus Estimate is $9.12 (read more: 3 Reasons to Buy TSMC Stock Beyond Record Q4 Net Profit).Image Source: Zacks Investment ResearchShun Semiconductor Stock AMD for Now Unlike NVIDIA and TSMC, for now, it’s best to avoid investing in Advanced Micro Devices, another key holding of SOXX. This is because AMD stock’s performance has been below par in the past five years due to weakness in the personal computer market aggravated by the pandemic. The chipmaker’s inability to take advantage of the AI bandwagon like NVIDIA, along with sluggish demand for gaming consoles, has failed to lift the AMD stock.AMD’s bulk revenues from outside the United States expose the company to exchange rate fluctuations, a headwind for its near-term prospects. AMD, at present, has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here. Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis Report iShares Semiconductor ETF (SOXX): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks