5 Stocks to Buy as AI Enthusiasm Continues to Drive Semiconductor Sales

The semiconductor market flourished in 2025 with robust demand for microchips, thanks to the bullish sentiment surrounding artificial intelligence (AI). AI, especially generative AI, has been driving semiconductor sales over the past two years, which has given the broader market a boost.

The steady surge in sales this year, coupled with massive investments in AI, hints at a promising market for semiconductors in 2026.

Given this scenario, it would be ideal to invest in semiconductor stocks, such as Analog Devices ADI, Silicon Laboratories Inc. SLAB, Taiwan Semiconductor Manufacturing Company Limited TSM, NVIDIA Corporation NVDA and ASML Holding N.V. ASML. Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Semiconductor Sales Surge

Global semiconductor sales totaled $72.7 billion in October, up 4.7% sequentially and 27.2% year over year from October 2024’s total of $57.2 billion, the Semiconductor Industry Association (SIA) reported last week.

John Neuffer, SIA president and CEO, said, “Global semiconductor sales continued to increase in October, topping September’s results and far outpacing October of last year. Growth continues to be driven by sales into the Americans and Asia Pacific.”

“Meanwhile, the 2025 WSTS autumn forecast calls for record-breaking global market growth in 2025, with sales projected to approach $1 trillion in 2026,” he added.

The jump in October sales follows a robust third quarter for semiconductors. Global semiconductor sales totaled $208.4 billion in the third quarter, surging 15.8% sequentially, according to SIA.

AI Enthusiasm Boosting Semiconductor Demand

Semiconductor sales have been on the rise over the past two years as enthusiasm surrounding AI is fueling demand for microchips. The AI space is vast and unexplored, and big tech companies are making aggressive investments in AI and have also been attributing their revenue growth to the robust AI business.

Big names like Amazon.com, Inc. AMZN and Microsoft Corporation MSFT have lately entered into major deals in AI that are expected to boost semiconductor sales.

Last month, Amazon announced a $38 billion partnership with OpenAI, allowing the company that created ChatGPT to expand its AI operations using cloud infrastructure from Amazon Web Services. Millions of GPU chips from NVIDIA Corporation will also be used as part of the agreement. Also, Nvidia's GB300 GPUs were given access to Microsoft in a $9.7 billion deal with data center company IREN Limited IREN.

5 Semiconductor Stocks With Growth Potential

Analog Devices

Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed-signal and digital signal processing (“DSP”) integrated circuits. ADI’s product line comprises amplifiers and comparators; analog to digital converters; digital to analog converters; video encoders and decoders; embedded processing products and DSPs; MEMS and temperature sensors; RF/IF components and converters; power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors. Analog Devices also offers analog, digital and RF switches and multiplexers; analog microcontrollers; clock and timing products.

Analog Devices’ expected earnings growth rate for the current year is 25%. The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the past 60 days. ADI carries a Zacks Rank #2.

Silicon Laboratories

Silicon Laboratories Inc. is a leading provider of silicon, software and solutions for the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. SLAB solves the electronics industry's toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity.

Silicon Laboratories’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 28.6% over the past 60 days. SLAB currently has a Zacks Rank #2.

Taiwan Semiconductor Manufacturing Company Limited

Taiwan Semiconductor Manufacturing Company Limited is the world's largest dedicated integrated circuit foundry. As a foundry, TSM manufactures ICs for its customers based on their proprietary IC designs using its advanced production processes. Taiwan Semiconductor Manufacturing Company Limited’s goal is to establish itself as one of the world's leading semiconductor companies by building upon the strengths that have made it the world's leading IC foundry.

Taiwan Semiconductor Manufacturing Company Limited’s expected earnings growth rate for the current year is 43.9%. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the past 60 days. TSM presently carries a Zacks Rank #2.

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 54.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.8% over the last 60 days. NVDA presently has a Zacks Rank #1.

ASML Holding N.V.

ASML Holding N.V. is a world leader in the manufacture of advanced technology systems for the semiconductor industry. ASML offers an integrated portfolio for manufacturing complex integrated circuits. ASML Holdingdesigns, develops, integrates, markets and services advanced systems used by customers, which are the major global semiconductor manufacturers, to create chips that power a wide array of electronic, communications and information technology products.

ASML Holding’s expected earnings growth rate for the current year is 39.5%. The Zacks Consensus Estimate for current-year earnings has improved 29% over the past 60 days. ASML currently carries a Zacks Rank #2.

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