3 Semiconductor Stocks Driving the Tech Boom
The semiconductor industry is the engine powering the tech boom and leading the way in developing high-performance graphics processors and AI accelerators that revolutionize computing. Semiconductors power everything from smartphones and data centers to autonomous vehicles and artificial intelligence, making their role in modern technology indispensable.
Thus, investors could consider watching fundamentally sound semiconductor stocks, NVIDIA Corporation (NVDA), Broadcom Inc. (AVGO), and QUALCOMM Incorporated (QCOM).
The semiconductor industry is leading the charge in technological advancements and continues to push the boundaries now and then. Companies in the sector are developing faster, smaller, and more energy-efficient chips that enable breakthroughs in emerging technologies like 5G, AI, and the Internet of Things. Also, the semiconductor industry had a robust 2024, with 19% growth and sales of $627 billion for the year.
The integration of semiconductor technology into various industries has created a ripple effect of growth. Companies that supply chips for high-performance computing, cloud infrastructure, and digital devices are experiencing significant revenue increases. Further, as per Precedence Research, the global semiconductor market is anticipated to reach $1.14 trillion by 2033, growing at a CAGR of 7.6%.
Given these positive market trends, let’s look at the fundamentals of the top three Semiconductor & Wireless Chip stocks, starting with the third pick.
Stock #3: NVIDIA Corporation (NVDA)
NVDA provides graphics, computing, and networking solutions internationally. It operates through two segments: Graphics and Compute & Networking. The company offers products used in gaming, professional visualization, data center, and automotive markets.
On January 16, NVDA released new NIM microservices for AI guardrails that are portable, optimized inference microservices that help companies improve their generative AI applications’ safety, precision, and scalability. This makes them ideal for scaling AI applications in healthcare, automotive, and manufacturing in locations like hospitals or warehouses.
In the same week, NVDA joined hands with IQVIA, the world’s leading provider of clinical research services, commercial insights, and healthcare intelligence, to build custom foundation models and agentic AI workflows to accelerate research, clinical development, and access to new treatments.
NVDA’s AI blueprint can help IQVIA unlock and automate complex, time-consuming tasks, allowing healthcare professionals to focus on strategic decision-making and human interaction.
During the third quarter that ended on October 27, NVDA’s revenue increased 93.6% year-over-year, amounting to $26.16 billion. It posted a non-GAAP operating income of $23.28 billion, recording a 101.4% increase from the prior-year quarter.
In addition, NVDA’s non-GAAP net income stood at $20.01 billion, up 99.7% year-over-year, while its non-GAAP earnings per share grew 102.5% from the year-ago value to $0.81. Also, its free cash flow rose 138.4% from the year-ago value to $16.79 billion.
According to the company’s outlook for the fourth quarter fiscal 2025, NVDA projects revenue of $32.50 billion, plus or minus 2%.
Analysts expect NVDA’s revenue for the fourth quarter (ended January 2025) to increase 72.5% year-over-year to $38.13 billion, while its EPS for the same period is expected to grow 63.9% from the prior year to $0.85. Moreover, it topped Street revenue and EPS estimates in each of the trailing four quarters, which is excellent.
The stock has gained 85.2% over the past year and 48.6% over the past nine months to close the last trading session at $133.57.
NVDA’s stance is apparent in its POWR Ratings. The stock has a B grade for Sentiment and Quality. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
Among the 90 stocks in the Semiconductor & Wireless Chip industry, it is ranked #38. Click here to see the additional NVDA ratings (Growth, Value, Momentum, and Stability).
Stock #2: Broadcom Inc. (AVGO)
AVGO is a global technology company that designs, develops, and supplies a broad range of semiconductors, focusing on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products. The company operates through two segments: Semiconductor Solutions and Infrastructure Software.
On January 28, AVGO unveiled the industry’s first innovative Emulex Secure Fibre Channel Host Bus Adapters (HBA). This new innovation is a cost-effective, easy-to-manage solution that helps enterprises encrypt all data as it moves between servers and storage and enhances SAN security seamlessly without compromising performance.
In the same month, AVGO launched the Brocade G710 24-port 64G switch, the industry’s most responsive and highly efficient SAN switch for rack-based infrastructure. This launch is easy to deploy and manage while delivering the reliability, security, and performance that customers demand. It is the industry’s most energy-efficient Fibre Channel switch, strengthening AVGO’s position in the market.
AVGO’s total net revenue for the fourth quarter (ended November 3, 2024) increased 51.2% year-over-year to $14.05 billion. Its non-GAAP operating income is $8.81 billion, indicating a 53.3% growth from the prior year’s quarter.
AVGO’s net income came in at $4.32 billion and $0.90 per share, up 22.7% and 8.4% year-over-year, respectively. The company’s adjusted EBITDA increased 50.3% from the year-ago value to $9.09 billion. Also, its free cash flow grew 16.1% from the same period last year to $5.48 billion.
Looking ahead, AVGO anticipates revenue for the fiscal first quarter of 2025 to be approximately $14.60 billion and adjusted EBITDA of approximately 66% of projected revenue.
Street expects AVGO’s revenue for the fiscal first quarter (ended January 2025) to increase 22.2% year-over-year to $14.62 billion. Its EPS for the same period is expected to register a 37.4% growth from the prior year, settling at $1.51. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters, which is promising.
AVGO shares have surged 83.1% over the past year and 76.4% over the past nine months to close the last trading session at $235.04.
AVGO’s fundamentals are reflected in its POWR Ratings. The stock has a B grade for Growth, Sentiment, and Quality. It is ranked #23 out of 90 stocks in the same industry.
Beyond what is stated above, we’ve also rated AVGO for Value, Momentum, and Stability. Get all AVGO’s ratings here.
Stock #1: QUALCOMM Incorporated (QCOM)
QCOM engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI).
On February 7, QCOM announced a technology collaboration with Qorix, a global provider of modular and integrated automotive middleware solutions, to help drive the future of Software-Defined Vehicles (SDVs) with high-performance, pre-integrated and scalable solutions.
Under this technology cooperation, Qorix’s middleware will be integrated into QCOM Technologies’ Snapdragon Digital Chassis platforms, which is designed to enable OEMs and tier-1 suppliers to develop next-generation vehicles quickly and efficiently.
On January 22, QCOM and Samsung collaborated to power the Galaxy S25, S25 Plus, and S25 Ultra globally with the Snapdragon® 8 Elite Mobile Platform. This uniquely customized collaboration revolutionizes intelligent mobile experiences on the most powerful and world’s fastest mobile system-on-a-chip to deliver premium image quality and power consumption on a Galaxy smartphone display. This collaboration is a significant leap in mobile technology, setting new standards for performance and efficiency.
In the first quarter (ended December 29, 2024), QCOM’s revenues increased 17.5% year-over-year to $11.67 billion. The company reported a non-GAAP operating income of $4.38 billion, indicating a 21.1% growth from the prior year’s quarter. QCOM’s non-GAAP net income came in at $3.83 billion, up 23.5% year-over-year, while its earnings per share grew 24% from the prior-year quarter to $3.41.
As per the business outlook for the fiscal second quarter, QCOM now forecasts GAAP revenues to be in the range of $10.3 billion to $11.2 billion and its non-GAAP EPS between $2.70 and $2.90.
The consensus revenue estimate of $10.56 billion for the fiscal second quarter (ending March 2025) represents a 12.6% increase year-over-year. The consensus EPS estimate of $2.80 for the about-to-be-reported quarter indicates a 14.7% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
Over the past year, the stock has surged 13.5%, closing the last trading session at $171.36.
QCOM’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It also has an A grade for Quality and a B for Value and Sentiment. Within the Semiconductor & Wireless Chip industry, it is ranked first. Click here to see QCOM’s ratings for Growth, Momentum, and Stability.
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NVDA shares were trading at $132.14 per share on Tuesday afternoon, down $1.43 (-1.07%). Year-to-date, NVDA has declined -1.60%, versus a 3.00% rise in the benchmark S&P 500 index during the same period.