Semiconductor Giants to Watch in 2025 News ad

Among chip companies, these three companies stand out in their ability to dominate their markets. Combined with Big Tech’s AI arms race, their leadership positions will position them for huge profits in 2024. That’s exactly what happened: as of the close on December 26, shares of these companies returned 182%, 123% and 97%. As we approach 2025, these companies will be able to continue to build on their strengths and have another successful year. Below, I’ll profile these companies and explain why they can continue to grow.

NVIDIA: King of Kings

NVIDIA today

$137.01 -2.92 (-2.09%)

(As of 12/27/2024 5:45 PM ET)

52 week range

$47.32

▼

$152.89

Dividend yield

0.03%

P/E ratio

53.92

Target price

$164.15

First of all, it’s irresistible NVIDIA NASDAQ: NVDA. Customers have demonstrated insatiable demand for the company’s GPUs, which accelerate computation of AI workloads. And just because the new year is approaching, it is difficult to foresee a change in this trend. To date, no other company has been able to truly compete with NVIDIA in the area of ​​AI system infrastructure and GPUs. Advanced microdevices NASDAQ: AMD trying to catch up, but the results are simply incomparable so far.

Anyone who wants top-notch AI infrastructure will have 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 fantastic systems and software to complete them.

In this area he is the undisputed champion. NVIDIA’s biggest risk isn’t competition; it is the idea that the artificial intelligence revolution is not delivering as promised. I don’t believe that will happen, but there will most likely be obstacles along the way. In 2025, more AI applications should emerge that have a real impact. This should further increase demand for NVIDIA’s cutting-edge chips.

Broadcom: A True NVIDIA Competitor

Broadcom today

$241.75 -3.61 (-1.47%)

(As of 12/27/2024 5:45 PM ET)

52 week range

$104.15

▼

$251.88

Dividend yield

0.98%

P/E ratio

210.03

Target price

$221.88

Broadcom NASDAQ: AVGO is another company that dominates its niche in the semiconductor market. It is truly the only firm that competes with NVIDIA when it comes to providing massive artificial intelligence computing power. However, it offers a different solution to the same problem compared to NVIDIA. The company specializes in the development of application-specific integrated circuits (ASICs). These are chips that the company makes for a specific customer, customizing them to suit their needs. Since they are the only customers who can use them, buying 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 through lower energy consumption and longer lifespan.

Broadcom shares have been soaring lately following the release of the company’s third-quarter earnings report. The company did not disappoint, growing total revenue by 51% and AI revenue by 220%. The company also announced that it has acquired three new hyperscaler clients and has the ability to add two more. These announcements point to tens of billions in future revenue for the firm.

In addition, Broadcom has other businesses that are experiencing decline. Analysts were expecting renewed growth in these markets. If this happens in 2025, coupled with the huge demand for ASICs, Broadcom stock could have another fantastic year.

TSMC: One chipmaker to rule them all

Taiwan Semiconductor Manufacturing Today

TSM

Taiwan semiconductor manufacturing

$201.63 -1.43 (-0.70%)

(As of 12/27/2024 5:45 PM ET)

52 week range

$98.80

▼

$212.60

Dividend yield

1.09%

P/E ratio

32.31

Target price

$214.00

The last one is one of the most important companies in the world, Taiwan Semiconductor Manufacturing Corporation. New York Stock Exchange: TSM. The company is central to a potential war between the United States and China, indicating its importance. TSMC is intuitively related to the other two stocks because it is the company that actually makes many of the chips developed by NVIDIA and Broadcom. As of early 2024, the company produced about 90% of the world’s most advanced semiconductors. This is still the case today.

Thus, as long as the demand for ever-better semiconductors continues, TSMC’s services will remain in high demand. Since tech companies and governments have a strong incentive to stay ahead of their competitors, I don’t see TSMC’s importance budging anytime soon.

Barring a major conflict in the South China Sea, TSMC should continue its successful operations. TSMC is also not standing still in the fight against this risk. To combat it, it is building facilities in the United States. Reports say that TSMC is in talks with NVIDIA to develop a new Blackwell AI chip at its Arizona plant.

Before you consider Taiwan Semiconductor Manufacturing, you should hear this.

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