The semiconductor market has seen steady growth this year after an impressive 2024, thanks to the continued optimism surrounding artificial intelligence and demand from a range of industries. Revenues have soared over the past two quarters, and the third quarter has started on a high note.
In fact, semiconductors have played a key role in the overall tech rally, which has been driving the broader market.
Given this scenario, it would be ideal to invest in semiconductor stocks, such as Advanced Micro Devices AMD, NVIDIA Corporation NVDA and Advanced Energy Industries, Inc. AEIS. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chip Sales Continue to Soar
Global semiconductor sales totaled $62.1 billion in July 2025, jumping a solid 20.6% year over year and 3.6% sequentially from June’s total of $59.9 billion, the Semiconductor Industry Association (SIA) said last week.
SIA also said that regional sales rose at an impressive pace on an annual basis. Year over year, semiconductor sales rose 35.6% in the Asia Pacific/All Other. In the Americas and China, sales rose 29.3% and 19.4%, respectively.
The impressive July figures come after a robust second quarter, wherein sales totaled $179.7 billion, up 7.8% from the previous quarter.
Semiconductor Sales Poised to Grow
Earlier this year, semiconductor sales slowed unexpectedly after worries emerged about U.S. tech firms losing ground to China’s low-cost AI platform, DeepSeek. However, the concerns were short-lived as experts quickly called DeepSeek overhyped and not a serious challenge to American companies.
Sales have mostly been growing at a steady pace this year. After an impressive 2024 — when global semiconductor revenues hit $627.6 billion, up 19.1% from $526.8 billion in 2023 — both the first and second quarters of 2025 have shown solid growth.
Much of this momentum comes from soaring demand for data center chips and memory products. With AI investments continuing to accelerate, analysts expect the semiconductor market to sustain double-digit growth throughout 2025.
3 Semiconductor Stocks With Upside
Advanced Micro Devices
Advanced Micro Devices has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focused company from a pure-bred consumer-PC chip provider. AMD has emerged as a strong challenger to NVIDIA's dominance in the graphic processing unit or GPU market based on its Radeon chips.
AMD's processors are primarily powered by the company's proprietary Zen CPU and Vega GPU architectures. Advanced Micro Devices generated revenues of $22.68 billion in 2023.
Advanced Micro Devices’ expected earnings growth rate for the current year is 20.5%. The Zacks Consensus Estimate for the current-year earnings has improved 4.1% over the past 60 days. AMD currently carries a Zacks Rank #1.
NVIDIA Corporation
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of 48.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the last 60 days. NVDA presently has a Zacks Rank #2.
Advanced Energy Industries, Inc.
Advanced Energy Industries, Inc. is one of the leading suppliers of power subsystems and process-control technologies to the semiconductor industry. AEIS now focuses primarily on power-conversion solutions, including direct current, pulsed DC, low-frequency, high-voltage, and radio frequency power supplies, as well as matching networks and remote plasma sources for reactive gas applications and RF instrumentation to leverage the semiconductor, flat panel display, and industrial markets.
Advanced Energy Industries’ expected earnings growth rate for the current year is 53.1%. The Zacks Consensus Estimate for current-year earnings has improved 10.1% over the past 60 days. AEIS currently carries a Zacks Rank #1.
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Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Advanced Energy Industries, Inc. (AEIS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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