Yahoo Finance 3 Stocks in Focus as NVIDIA Powers AI Semiconductor Boom
The dream run for NVIDIA Corporation NVDA has been continuing for more than 17 months. On Jun 5, the semiconductor giant hit yet another milestone after its shares jumped 5% to take its market value past $3 trillion for the first time, becoming the second-biggest company in the United States.
NIVIDA’s new milestone added fuel to the Nasdaq rally, helping the tech-heavy index close at 17,187.92, hitting a fresh all-time high. Moreover, the Philadelphia Semiconductor Index (SOX) jumped 4.5% to finish at 5,347.44, also registering an all-time high.
NVIDIA’s rally isn’t a recent phenomenon. The company has been a market leader in generative artificial intelligence (AI) and has been at the heart of the boom surrounding the space.
Its shares have soared 211.5% in the past 12 months and 146.4% year to date.
Wednesday’s rally follows the unveiling of NVIDIA’s new AI chip architecture called “Rubin” by its Jensen Huang at an industry conference in Taipei. Huang also announced that the company will launch a high-performance version of its Blackwell chip, named the Blackwell Ultra, in 2025.
The Rubin architecture will introduce new GPUs for launching AI systems, CPUs and networking chips. It also comes with new features, such as a central processor named "Vera." Rubin is scheduled for release in 2026.
Also, an Ultra version of Rubin will be available in 2027.
Last month, NVIDIA announced that its first-quarter fiscal 2025 revenues reached an impressive $26.04 billion, reflecting a 262% year-over-year surge. This marks the third consecutive quarter of growth exceeding 200%. The revenues also surpassed the consensus estimate of $24.33 billion.
Needless to say, Nvidia's remarkable surge is driven by its graphics processing units, which have ignited a surge in AI advancements. The optimism surrounding AI has been gathering steam over the past five years, driven by the rapid penetration of the Internet and other digital technologies.
The AI market is expected to explode in the coming days with demand for AI chipsets already surging. This has seen tech giants like Microsoft Corporation (MSFT), Meta Platforms (META), Alphabet, Inc. (GOOGL), and Amazon.com, Inc (AMZN) rushing to develop AI technologies.
Experts believe that AI is still at its nascent stage and its true potential is yet to be seen by the world.
Stocks in Focus
We have chosen three semiconductor stocks that are poised to benefit from the soaring demand for AI-based processors.
Micron Technology MU manufactures and markets high-performance memory and storage technologies including Dynamic Random Access Memory (DRAM), NAND flash memory, NOR Flash, 3D XPoint memory and other technologies. MU’s solutions are used in leading-edge computing, consumer, networking and mobile products. A major portion of Micron Technology’s revenues is derived from DRAM sales. MU’s mission is to be the most efficient and innovative global provider of semiconductor memory solutions. Micron reported revenues of $15.54 billion in fiscal 2023.
Micron Technology’s expected earnings growth rate for the current year is 119.2%. The Zacks Consensus Estimate for current-year earnings has improved 6.3% over the past 30 days. MU presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
QUALCOMM Incorporated QCOM designs, manufactures and markets digital wireless telecom products and services based on the Code Division Multiple Access (CDMA) technology. QCOM’s products include CDMA-based integrated circuits and system software for wireless voice and data communications as well as global positioning system products. QUALCOMMalso offers development and other product-related services to U.S. government agencies and their contractors.
QUALCOMM’s expected earnings growth rate for the current year is 17.1%. The Zacks Consensus Estimate for the current-year earnings has improved 0.3% over the past 30 days. QCOM currently carries a Zacks Rank #3 (Hold).
Advanced Micro Devices AMD has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focus company from a pure-bred consumer-PC chip provider. AMD has emerged as a strong challenger to NVIDIA's dominance in the graphic processing unit or GPU market based on its Radeon chips.
AMD's processors are primarily powered by the company's proprietary Zen CPU and Vega GPU architectures. Advanced Micro Devices generated revenues of $22.68 billion in 2023.
Advanced Micro Devices’ expected earnings growth rate for the current year is 29.1%. The Zacks Consensus Estimate for the current-year earnings has improved 0.3% over the past 30 days. AMD currently carries a Zacks Rank #3.
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