Semiconductor sales have been steadily increasing over the past year, driven largely by growing enthusiasm for artificial intelligence (AI), especially generative AI. With strong demand from multiple industries, semiconductor revenues have surged over the past few quarters.
In fact, the semiconductor industry—an integral part of the broader tech sector—was a major contributor to last year’s stock market rally.
Given this scenario, it would be ideal to invest in semiconductor stocks such as NVIDIA Corporation NVDA, RF Industries, Ltd. RFIL, ASML Holding N.V. ASML and Magnachip Semiconductor Corporation MX. 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.
According to the latest report from the Semiconductor Industry Association (“SIA”), global semiconductor sales totaled $54.9 billion in February, up 17.1% from $46.9 billion in February 2024.
This marks the 10th consecutive month that semiconductor sales have jumped over 17% year over year. However, sales slipped 2.9% on a month-over-month basis. SIA President and CEO John Neuffer noted, “Despite a slight decline in month-to-month sales, the global semiconductor industry hit its highest-ever monthly sales total for the month of February, driving strong year-to-year growth.”
The slight drop in February’s monthly numbers was likely due to rising concerns about the future of U.S. tech companies in the AI space, particularly after the debut of DeepSeek, a lower-cost Chinese alternative. Nonetheless, experts believe the reaction to DeepSeek’s launch was exaggerated and short-lived.
The February results came on the heels of a strong 2024, during which global semiconductor sales climbed to $627.6 billion—a 19.1% jump from $526.8 billion in 2023. Fourth-quarter sales alone hit $170.9 billion, reflecting a 17.1% year-over-year increase and a 3% rise from the prior quarter.
Much of this momentum is being driven by growing semiconductor demand in data centers, with the memory segment playing a major role. As tech companies continue to invest heavily in AI, those integrating AI into their products are seeing impressive returns.
Industry analysts remain bullish on AI’s potential and anticipate ongoing growth as more chipmakers enter the AI race. The SIA is also predicting another year of double-digit growth in 2025.
Also, according to a new report from Precedence Research, the global semiconductor market size is estimated to reach 627.76 billion in 2025 and is projected to hit $1,207.51 billion by 2034.
NVIDIA Corporation is a major player in the semiconductor industry and has been one of the standout success stories of 2023 and 2024. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence and the mining or production of cryptocurrencies.
NVIDIA’s expected earnings growth rate for the current year is 48%. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the past 60 days. Currently, NVIDIA has a Zacks Rank #2.
RF Industries, Ltd. is engaged in the design, manufacture and distribution of coaxial connectors used in radio communications applications as well as in computers, test instruments, PC LANS and antenna devices.
RF Industries’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 9.5% over the past 60 days. RFIL presently carries a Zacks Rank #1.
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 21.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. ASML currently carries a Zacks Rank #2.
Magnachip Semiconductor Corporation operates as a designer and manufacturer of analog and mixed-signal semiconductor products for high-volume consumer applications. MX operates through three key segments: Display Solutions, Power Solutions and Semiconductor Manufacturing Services.
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