In this piece, we will take a look at the 11 best semiconductor stocks to invest in for the AI boom. If you want to skip our introduction covering how without the semiconductor industry, and how it’s essential to the development of artificial intelligence, then you can skip ahead to the 5 Best Semiconductor Stocks To Invest In for the AI Boom.
Earlier this year, OpenAI’s co-founder and chief executive officer Sam Altman demonstrated his ability to remain in the news after estimating that building an independent supply chain of semiconductors for all possible AI use cases could require $7 trillion in capital. Altman’s talk involved his vision of a massive boost to global chip making foundries, energy, data centers, and other infrastructure needed to sustain the demand for GPUs for AI applications worldwide.
While $7 trillion may seem like a staggering amount, it’s within the realm of possibilities in the semiconductor industry. During NVIDIA Corporation’s earnings call for the second quarter of its previous fiscal year, founder and CEO Jensen Huang mentioned the significant shift towards accelerated computing and generative AI that can drive a trillions of dollars worth of investment.
Huang and Altman’s comments indicate the potential for trillions of dollars in growth in the global semiconductor industry, especially concerning AI.
Various other semiconductor executives, including those from Intel Corporation, Advanced Micro Devices, Inc., and Taiwan Semiconductor Manufacturing Company, have also commented on AI. These companies are positioned to benefit from the growth of AI-related technologies.
In the era of artificial intelligence, hedge funds are buying semiconductor stocks that show promise. The methodology to select these stocks is based on hedge fund investing activity during Q4 2023.
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Our Methodology
To compile our list of the best semiconductor stocks for the AI boom, we analyzed hedge fund activity in Q4 2023 and selected stocks with significant hedge fund ownership.
For the selected semiconductor stocks, we have included hedge fund sentiment, as hedge funds’ top picks have outperformed the market significantly over the past decade. This indicator provides valuable insight for investors.
11 Best Semiconductor Stocks To Invest In for the AI Boom
11. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Investors In Q4 2023: 62
One of the top hedge fund picks, Analog Devices, Inc., offers various semiconductor products for computing use cases. With a Buy rating and an average price target of $206, this stock is attractive to investors.
In Q4 2023, 62 hedge funds owned shares of Analog Devices, Inc., making it a popular choice among investors.
10. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Investors In Q4 2023: 62
ASML Holding N.V. is a key player in the semiconductor industry, known for manufacturing machines to produce advanced chips. Despite geopolitical tensions, this stock remains popular among hedge funds.
Out of the 933 hedge funds analyzed, 62 had a stake in ASML Holding N.V., making it a significant investment for many.
9. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Investors In Q4 2023: 67
Lam Research Corporation focuses on backend semiconductor products that support chip designers like NVIDIA. With 67 hedge funds investing in the company, it remains a strong contender in the industry.
During Q4 2023, 67 hedge funds were invested in Lam Research Corporation, making it a popular choice among investors.
8. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Investors In Q4 2023: 70
Applied Materials, Inc. is a leading manufacturer of semiconductor equipment, facing challenges due to geopolitical tensions. Despite this, 70 hedge funds had shares of this company in Q4 2023.
Hedge funds find Applied Materials, Inc. attractive, with 70 of them investing in the company during Q4 2023
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