Semiconductor Stocks To Buy

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Semiconductor Stocks To Buy

2 Semiconductor Stocks To Buy

If we look back a few years ago, no one was taking the semiconductor stocks seriously.However, the AI boom has changed everything, and now one of the hottest commodities is semiconductors.

According to estimates, the global chip sales in 2025 were around $791 billion. If the AI spending continues to rise, that number can easily touch $1 trillion.

So, it is still a good idea to buy the semiconductor stocks as the AI boom is still in its early stages. With that in mind, we have picked Taiwan Semiconductor Manufacturing and Arm Holdings as the best two semiconductor stocks to own.

Taiwan Semiconductor Manufacturing

Most of the chip companies don't make their own chips. Instead, they usually outsource the production to other firms known as foundries.

TSMC is a foundry just like that and is a global leader when it comes to manufacturing chips. As of now, around 72% of TSMC's revenue comes from its foundry operations. TSMC also makes the Blackwell and Hopper chips for Nvidia, highlighting its strength.

Now, TSMC is also working on the production of the Vera Rubin, which is the upcoming chip by Nvidia. Also, there are reports that Meta Platforms has also chosen TSMC to make its chips.

According to analysts, the TSMC earnings are expected to grow at a 30% each year. So, if you want to buy a semiconductor stock that works behind the scenes, then go for TSMC.

Arm Holdings

Processor chips run on ISA, also known as instruction set architecture. This is the foundation language that allows the processor chips to function.

Arm Holdings makes the ISAs and then licenses them to big-name customers who are involved in designing chips. According to estimates, Arm Holdings has shipped 325 billion chips, which are used in almost everything.

The chips from Arm Holdings can be found in data centers, cars, smartphones, and any other electronic product you can think of!

Considering the strong developer base and existing chips, Arm Holdings isn't going anywhere soon. After all, it is very difficult to move to another architecture, and that's what also makes Arm Holdings so resilient.

According to analysts, the earnings of Arm Holdings are expected to grow 32% annually. Although the P/E ratio of Arm Holdings is high, analysts think that earnings will eventually make it more reasonable.

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