Semiconductor giants to watch in 2025 – Magic Post

Among chip stocks, these three companies stand out for their ability to dominate their markets. Combined with the AI ​​arms race at big tech companies, their leading positions have set their stocks up for massive returns in 2024. And that’s exactly what happened, as these names returned 182%, 123%, and 97% as of the December 26 close. As we move into 2025, these companies can continue to play to their strengths and have another strong year. Below, I’ll reveal these companies and explain the thesis on why they continue to rise.

Nvidia: King of Kings

Nvidia today

$137.01 -2.92 (-2.09%)

(As of 12/27/2024 at 05:45 PM ET)

52 week range

$47.32

▼

$152.89

Dividend yield

0.03%

P/E ratio

53.92

Price target

$164.15

The first is NVIDIA which is not discrete Nasdaq: NVDA. Customers have shown insatiable demand for the company’s GPUs that accelerate the computation of AI workloads. Because the new year has begun, it is difficult to see this trend changing. So far, no other company has stepped up to truly compete with NVIDIA in AI infrastructure and GPU-based systems. Advanced micro devices Nasdaq: AMD You’re trying to catch up, but the results simply aren’t comparable yet.

Anyone who wants high-quality AI infrastructure will need to go through NVIDIA one way or another. That is unless they are willing to pay to buy from another company on this list. NVIDIA faces more competition. But it still has the fastest GPUs. It also has great systems and software to go with it.

In this field, he is the undisputed champion. The biggest threat facing NVIDIA is not competition; It’s the idea that the AI ​​revolution is not yielding the promised results. I don’t think that will be the case, but there will likely be speed bumps along the way. In 2025, more AI applications that create real-world effects should emerge. This would boost demand for advanced NVIDIA chips.

Broadcom: NVIDIA’s real competitor

Broadcom today

$241.75 -3.61 (-1.47%)

(As of 12/27/2024 at 05:45 PM ET)

52 week range

$104.15

▼

$251.88

Dividend yield

0.98%

P/E ratio

210.03

Price target

$221.88

Broadcom Nasdaq:AFGO is another company that dominates its own niche in the semiconductor market. It’s really the only company that competes with NVIDIA when it comes to providing massive amounts of AI computing power. However, it offers a different solution to the same problem compared to NVIDIA. The company focuses on designing application-specific integrated circuits (ASICs). These are chips that a company manufactures for a specific customer, customizing them to meet their needs. Since they are the only customers who can use them, purchasing these chips from Broadcom requires a huge upfront investment. However, the specialization of these chips means that they are extremely efficient. Over time, they save data center operators money due to their lower energy use and longer lifespan.

Broadcom shares rose significantly recently following the company’s third-quarter earnings announcement. The company did not disappoint, Total revenue growth of 51% And AI-driven revenue increased by 220%. The company also announced that it has acquired three new Hyperscaler customers, with the opportunity to add two more. These announcements point to tens of billions in future revenue for the company.

Furthermore, Broadcom has other parts of its business experiencing a slowdown. Analysts were waiting for a return to growth in these markets. If that happens in 2025, coupled with massive demand for ASICs, Broadcom stock could have another great year.

TSMC: One chip maker to rule them all

Semiconductor manufacturing in Taiwan today

TSM

Taiwan Semiconductor Manufacturing Co., Ltd

$201.63 -1.43 (-0.70%)

(As of 12/27/2024 at 05:45 PM ET)

52 week range

$98.80

▼

$212.60

Dividend yield

1.09%

P/E ratio

32.31

Price target

$214.00

Last is one of the most important companies in the world, Taiwan Semiconductor Manufacturing Company New York Stock Exchange: TSM. The company is the focus of a potential war between the United States and China, which indicates how important it is. TSMC is intuitively related to the other two stocks, as it is the company that already manufactures many of the chips designed by NVIDIA and Broadcom. At the beginning of 2024, the company manufactured nearly 90% of the world’s most advanced semiconductors. This is still the case today.

Therefore, as long as demand for more advanced semiconductors persists, demand for TSMC’s services will be strong. Since technology companies and governments have strong interests in always staying ahead of their competitors, I don’t see the importance of TSMC budging anytime soon.

Barring a major conflict in the South China Sea, TSMC should continue its strong performance. TSMC is also not sitting idly by in the face of this threat. To combat it, it is building facilities in the United States. Reports say that TSMC NVIDIA is in talks to develop the new Blackwell AI chip at its factory in Arizona.

Before you consider semiconductor manufacturing in Taiwan, you’ll want to hear this.

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