In this article, we will discuss the 10 High Growth Semiconductor Stocks That Are Profitable Heading into 2025.
Semiconductors have led industrial advancements and aided key applications such as personal computing, data centers, and cloud computing. As per PwC, Memory ICs were the fastest-growing semiconductor category over the previous 2 decades, with DRAM and HBM standing out. The broader DRAM market is supported by cost and scale, while HBM, because of its advanced technological requirements, reflects a high-barrier, closed-loop ecosystem.
Global Semiconductor Sales Rose 20.7% YoY in November 2024
The Semiconductor Industry Association (SIA) announced that global semiconductor sales touched $57.8 billion during November 2024 month, demonstrating 20.7% growth as compared to November 2023 total of $47.9 billion and 1.6% growth as compared to the October 2024 total of $56.9 billion. As per the report published by SEMI (Semiconductor Equipment and Materials International), the semiconductor industry is expected to begin 18 new fab construction projects in 2025. These new projects will include three 200mm and fifteen 300mm facilities. Notably, the majority will begin operations from 2026 – 2027.
In 2025, the Americas and Japan will be the leading regions with 4 projects each. Next, China and Europe & Middle East regions have 3 planned construction projects. Finally, Taiwan has 2 planned projects, with Korea and Southeast Asia having 1 project each for this year. As per SEMI’s President and CEO, investments have been fueling leading-edge and mainstream technologies to cater to dynamic global demands. Gen-AI and high-performance computing continue to fuel advancements in the leading-edge logic and memory segments. However, mainstream nodes have supported crucial automotive, IoT, and power electronics applications.
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Semiconductor Capacity to Ramp Up
SEMI projects semiconductor capacity to accelerate further, with a 6.6% yearly growth rate to a total of 33.6 million wafers per month (wpm) for 2025. This expansion is expected to primarily stem from leading-edge logic technologies in high-performance computing (HPC) applications and higher penetration of generative AI in edge devices. Overall, the broader semiconductor industry continues to focus on building advanced computing capabilities, and responding to the increased computational demands of LLMs.
Moving forward, foundry suppliers are expected to be the leaders in purchases of semiconductor equipment. The Foundry segment can increase capacity by 10.9% YoY, increasing from 11.3 million wpm in 2024 to 12.6 million wpm in 2025.
Amidst this optimism, let us now have a look at the 10 High Growth Semiconductor Stocks That Are Profitable Heading into 2025
Our Methodology
To list the 10 High Growth Semiconductor Stocks That Are Profitable Heading into 2025, we conducted extensive research and scanned through several online rankings to shortlist companies having ~10% revenue growth over the previous 5 years and TTM net income of at least $400 million. We also mentioned the hedge fund sentiments around each stock, as of Q3 2024. Finally, the stocks were ranked in ascending order of their hedge fund sentiments.
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10 High Growth Semiconductor Stocks That Are Profitable Heading into 2025
10) Monolithic Power Systems, Inc. (NASDAQ:MPWR)
5-year Sales Growth: ~27.11%
TTM net income: $434.2 Million
Number of Hedge Fund Holders: 38
Monolithic Power Systems, Inc. (NASDAQ:MPWR) is a semiconductor company, specializing in power solutions. The company’s business focuses on designing, developing, and manufacturing integrated circuits utilized for efficient power management in a range of applications. Citi initiated coverage on the company’s shares, providing a “Buy” with a price objective of $700. Monolithic Power Systems, Inc. (NASDAQ:MPWR)’s sales growth is expected to be driven by the anticipated analog inventory replenishment. Furthermore, Citi expects that expanding AI and automotive markets is expected to offset potential losses in the company’s market share.
Elsewhere, Truist Securities’ analyst lauded the company’s strong footing with a variety of AI customers. This diverse customer base can aid Monolithic Power Systems, Inc. (NASDAQ:MPWR)’s growth over the next few years. The company is being recognized for its broad engagement throughout the AI sector, which can translate into long-term growth despite short-term market challenges. The elevated investments in AI hardware throughout industries directly correlate with increased demand for power management solutions. With AI workloads becoming more energy-intensive, Monolithic Power Systems, Inc. (NASDAQ:MPWR)’s emphasis on energy-efficient power solutions can support its growth prospects.
Fred Alger Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Monolithic Power Systems, Inc. (NASDAQ:MPWR) designs high-performance power management solutions, leveraging its expertise in analog design, proprietary process technologies, and system-level applications. Its fabless manufacturing model enables nimble innovation and scalability without requiring the high volumes typical of peers with internal manufacturing. The company serves diverse end markets, including enterprise data, where it has been the sole supplier of power management integrated circuits (ICs) for Nvidia’s AI chips since early 2023, driving significant growth. However, recent reports of potential share loss on Nvidia’s Blackwell platform due to technical issues, which management refutes, have raised some concerns. While management acknowledges the eventual introduction of additional suppliers, we believe these fears are overblown.”
9) Lam Research Corporation (NASDAQ:LRCX)
5-year Sales Growth: ~10.44%
TTM net income: $4,056.8 Million
Number of Hedge Fund Holders: 58
Lam Research Corporation (NASDAQ:LRCX) is engaged in designing, manufacturing, marketing, refurbishing, and servicing semiconductor processing equipment that is used in the fabrication of integrated circuits. The company’s focus on its “4 Horsemen” technologies – Gate-All-Around (GAA), Backside Power, Advanced Packaging, and Dry Resist – reflects a strong opportunity for future growth. Notably, these transformative technologies remain well-placed to address the evolving needs of semiconductor manufacturers as they focus on chip performance and efficiency.
The “4 Horsemen” technologies point to 4 key areas of innovation that the company focuses on to enable advanced semiconductor manufacturing and address difficulties posed by complex chip designs. With the industry transitioning to more advanced node processes, Lam Research Corporation (NASDAQ:LRCX)’s expertise in such critical areas is expected to result in higher market share and increased margins. For example, the adoption of GAA transistors is anticipated to accelerate over the coming years, potentially fueling demand for the company’s specialized equipment. Furthermore, higher demand for semiconductors fueled by dynamic trends such as 5G, AI, autonomous vehicles, and IoT is expected to create a continuous need for Lam Research Corporation (NASDAQ:LRCX)’s equipment.
KeyBanc analyst, Steve Barger, upped Lam Research Corporation (NASDAQ:LRCX)’s shares to “Overweight” from “Sector weight,” giving a price objective of $95. As per the analyst, factors such as a transition to new technologies and the rise of generative AI are expected to support the company. Vltava Fund, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials and Lam Research Corporation (NASDAQ:LRCX). Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Dozens of companies are directly or indirectly involved in the production of semiconductors. Within this broad group of companies, there are several without which it would not be possible to produce advanced types of semiconductors in the world today. These include a group of five very well-known companies, each of which has a dominant global position in its particular field, and which together operate more or less as oligopolies. These are Lam Research, Applied Materials, KLA Corporation, ASML, and Tokyo Electron. At the end of the year, we benefited from a significant correction in the share prices of Applied Materials and Lam Research, and, together with KLA Corporation, we now own three of them. We view these as one collective investment into a critical point within a very important segment of the global economy that is growing and will continue to grow over the long term.
Lam Research manufactures wafer fabrication equipment for the semiconductor industry and also provides related services. The company is a market leader in plasma etching, thin film deposition platforms, photoresist systems, as well as wet and plasma-based cleaning products for individual wafers. Its main customers are the four major semiconductor manufacturers Micron, Samsung, SK Hynix, and Taiwan Semiconductors. Lam Research is a business with net margins of around 27% and ROCE of about 30%. Capital outlays are relatively small. The company has good capital allocation with a preponderance of share buybacks…” (Click here to read the full text)
8) KLA Corporation (NASDAQ:KLAC)
5-year Sales Growth: ~15.97%
TTM net income: $2,966.4 Million
Number of Hedge Fund Holders: 61
KLA Corporation (NASDAQ:KLAC) is engaged in designing, manufacturing, and marketing process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries. Simply put, the company specializes in tools monitoring and improving manufacturing processes for semiconductor wafers, integrated circuits, and other devices. Needham analysts upgraded the company’s shares from “Hold” to “Buy.” This upgrade demonstrates the firm’s confidence in KLA Corporation (NASDAQ:KLAC)’s performance during tough times and its ability to outshine competitors.
As per Needham, semiconductor capital customers can limit capacity expansion because of uncertainty, but not technology upgrades, primarily in advanced nodes. This trend is expected to favour KLA Corporation (NASDAQ:KLAC). Just to let the readers know, the semiconductor capital industry refers to the manufacturing of equipment and machinery used to make semiconductor devices, including microchips and integrated circuits. Furthermore, KLA Corporation (NASDAQ:KLAC) is expected to benefit from an ever-evolving AI trend in the semiconductor industry, which continues to fuel demand for more advanced and complex chip designs.
With chip designs becoming more intricate and complex, the need for sophisticated process control tools, like those offered by KLA Corporation (NASDAQ:KLAC), continues to increase. Cantor Fitzgerald reissued a “Neutral” rating on the company’s shares, setting a $925.00 price target on 8th October. Parnassus Investments, an investment management company, released the Q2 2024 investor letter. Here is what the fund said:
“KLA Corporation (NASDAQ:KLAC), a provider of process control and yield management solutions for the semiconductor and related nanoelectronics industries, continued its strong run. We expect KLA will continue to benefit from the increasing complexity of chip designs.”
7) Analog Devices, Inc. (NASDAQ:ADI)
5-year Sales Growth: ~10%
TTM net income: $1,635.3 Million
Number of Hedge Fund Holders: 63
Analog Devices, Inc. (NASDAQ:ADI) remains a critical player in the semiconductor industry, which specializes in designing, manufacturing, and marketing analog, mixed-signal, and digital signal processing (DSP) integrated circuits. With the broader semiconductor industry moving towards an upcycle, Analog Devices, Inc. (NASDAQ:ADI) is well-placed to capitalize on the recovery. Its high-quality assets, strong industrial exposure, and new design wins throughout business lines offer a robust foundation for outperformance.
If the recovery paces up, Analog Devices, Inc. (NASDAQ:ADI) is expected to see significant upside potential. Its ability to innovate and adapt to a dynamic market environment, together with a strong presence in secular growth areas, can enable it to capture a significant share of the market during the upcycle. Truist Securities increased the price objective on the shares of Analog Devices, Inc. (NASDAQ:ADI) from $216.00 to $230.00.
Many applications need analog-to-digital and digital-to-analog conversion in order to bridge real-world signals with digital systems. With industries adopting more advanced technologies, the demand for Analog Devices, Inc. (NASDAQ:ADI)’s precision signal processing will continue to grow. Some of the key markets are automotive, industrial automation, communications, and consumer electronics. Carillon Tower Advisers, an investment management company, released its Q2 2024 investor letter. Here is what the fund said:
“Analog Devices, Inc. (NASDAQ:ADI) rebounded as management teams at several semiconductor companies in the analog space called the bottom, seeing improved conditions ahead. The analog semiconductor industry is a very cyclical business that has underperformed the broader semiconductor industry for several years.”
6) ASML Holding N.V. (NASDAQ:ASML)
5-year Sales Growth: ~19.15%
TTM net income: $7,733.7 Million
Number of Hedge Fund Holders: 64
ASML Holding N.V. (NASDAQ:ASML) is engaged in developing, producing, marketing, selling, and servicing advanced semiconductor equipment systems for chipmakers. The semiconductor industry continues to experience a period of significant transformation, courtesy of healthy demand for AI capabilities and the push towards more advanced manufacturing nodes. The company is expected to benefit from these trends, mainly via the growing demand for High Bandwidth Memory (HBM) used in AI chips. This is primarily because manufacturing HBM chips needs leading-edge processes, often at smaller nodes, which require advanced lithography equipment like ASML Holding N.V. (NASDAQ:ASML)’s machines.
Wells Fargo & Company increased the target price on the company’s shares from $790.00 to $860.00, giving an “Overweight” rating on 13th January. ASML Holding N.V. (NASDAQ:ASML)’s strong position in EUV lithography, together with continued investment in R&D, offers healthy potential for market expansion. Its work on high-NA EUV technology reflects the next frontier in semiconductor manufacturing, which assures even finer resolution and improved chip performance. As this technology matures and sees adoption by renowned chipmakers, ASML Holding N.V. (NASDAQ:ASML) is expected to see a new wave of high-value system sales.
Polen Capital, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“During the period, we added to our ASML Holding N.V. (NASDAQ:ASML) position in the face of recent volatility across the semiconductor sector broadly. As readers may recall, we trimmed the position in 4Q 2023 as we expected stagnating business trends to set in during 2024. Stagnation did occur, as did Al hysteria. We now foresee robust growth and believe ASML will see a significant ramp in business trends in 2025 and beyond. ASML’s business backlog and its customers’ persistent development of leading-edge chip sizes drive our expectation of rapid growth for the company in the coming years. In our view, shares trade at a very reasonable valuation for one of the world’s most competitively advantaged growth companies, particularly considering the accelerated growth we expect.”
5) Applied Materials, Inc. (NASDAQ:AMAT)
5-year Sales Growth: ~13.22%
TTM net income: $7,177.0 Million
Number of Hedge Fund Holders: 74
Applied Materials, Inc. (NASDAQ:AMAT) is engaged in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. Morningstar believes that the company tends to benefit from good AI investment and broader demand across semiconductor markets. The firm expects 8% compound annual sales growth for Applied Materials, Inc. (NASDAQ:AMAT) through fiscal 2029. Furthermore, it projects strong growth for the company in fiscal 2025 and 2026, aided partly by strong capacity expansions at chipmakers to supply AI demand. The company’s system sales are the most cyclical, while its services business is stable, which supports offsetting some cyclicality on the top line.
Morningstar gave a wide moat rating to the company, given its intangible assets and switching costs. As per the firm, Applied Materials, Inc. (NASDAQ:AMAT) has the most comprehensive portfolio of equipment for semiconductor manufacturing. The company is expected to benefit from drivers of chip complexity, such as gate-all-around transistors and advanced packaging. Furthermore, Morningstar expects the company to focus on generating strong cash flow while prioritizing R&D investment.
KeyCorp upgraded the shares of Applied Materials, Inc. (NASDAQ:AMAT) from a “Sector weight” rating to an “Overweight” rating, providing a price target of $225.00 on 17th January. Vltava Fund, an investment management company, recently released its Q4 2024 investor letter. Here is what the fund said:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials, Inc. (NASDAQ:AMAT) and Lam Research. Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Applied Materials provides manufacturing equipment, services, and software for the semiconductor, display, and related industries. Its principal business activities are semiconductor systems and Applied Global Services. Its largest customers are Samsung and Taiwan Semiconductors, but its overall clientele is more diversified than is that of Lam Research. At first glance, it would appear that Applied Materials has a somewhat less tangible and definable competitive advantage compared to KLA Corporation and Lam Research, but the numbers do not support such a view. Net margins likewise in the neighborhood of 27% and ROCE around 30% are outstanding. Basically, it can be said that all three companies we own have very similar underlying profitability metrics. Even their valuations, growth, and potential are similar. All have strong free cash flow and strong balance sheets, and they are regularly buying back their own shares over the long term and in large volumes…” (Click here to read the full text)
4) Advanced Micro Devices, Inc. (NASDAQ:AMD)
5-year Sales Growth: ~32.17%
TTM net income: $1,826.0 Million
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor company worldwide. Loop Capital analyst, Gary Mobley, believes that the company stands at the cross-section between the changing system hardware architecture of general-purpose compute as well as accelerated compute. Therefore, the analyst, while initiating the coverage, rated the company’s shares as “Buy,” providing a price target of $175. Loop Capital expects that Advanced Micro Devices, Inc. (NASDAQ:AMD) is well-placed to capture 20% of the data center GPU market by 2028, fueling $55-$60 billion in revenue.
While NVIDIA has been holding a dominant position in the AI GPU market, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s emphasis on delivering high-performance, energy-efficient solutions for both AI training and inference workloads continues to gain attention from major cloud service providers and enterprise customers. The company’s open-source approach with its ROCm™ software platform is expected to attract developers, challenging NVIDIA’s proprietary CUDA environment. The introduction of AI-enabled PCs can also act as a catalyst for the client computing segment, fueling a longer upgrade cycle and aiding higher average selling prices.
The company is well-placed to capitalize on this trend given its integrated AI capabilities in future processor designs. Rosenblatt Securities reaffirmed a “Buy” rating on the shares of Advanced Micro Devices, Inc. (NASDAQ:AMD). The firm gave a price target of $250.00 on 28th October.
3) Broadcom Inc. (NASDAQ:AVGO)
5-year Sales Growth: ~17.94%
TTM net income: $5,895.0 Million
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) is a leading semiconductor company having a diversified portfolio of products and technologies serving a wide range of markets. Fang Boon Foo, an analyst from DBS, maintained a “Buy” rating on the company’s shares, offering a price target of $200.00. This rating was driven by a combination of factors, including Broadcom Inc. (NASDAQ:AVGO)’s strategic growth through acquisitions, like the integration of VMware, which further cements the company’s position in the infrastructure software market. This inorganic growth strategy enables the company to differentiate itself via high-performance design and integration capabilities.
Furthermore, Broadcom Inc. (NASDAQ:AVGO) is expected to benefit significantly from the booming demand for AI chips. In FY 2024, the company’s semiconductor revenue sat at $30.1 billion, fueled by AI revenue of $12.2 billion. AI revenue went up by 220% YoY, courtesy of its leading AI XPUs and Ethernet networking portfolio. Moving forward, the strong outlook for its infrastructure software segment will also contribute to the company’s growth prospects. In FY 2024, Broadcom Inc. (NASDAQ:AVGO)’s revenue increased 44% YoY to a record $51.6 billion, with infrastructure software revenue increasing to $21.5 billion, on the successful VMware integration.
Munro Partners, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“Broadcom Inc. (NASDAQ:AVGO) contributed 94bps to Fund performance for the quarter. Broadcom is a fabless semiconductor company that designs semiconductors for a range of different industries and applications, based in Palo Alto, California. The company plays an important role in providing semiconductors for AI, specifically, they provide hyperscale data centre companies custom silicon chips. Over time, as companies such as Meta, Alphabet, Amazon and Microsoft build out their AI offering, the critical semiconductor content will come from both custom silicon chips, designed by companies such as Broadcom, and merchant silicon chips, designed by Nvidia. Depending on the use case, or workload, the hyperscaler will use either a custom silicon semiconductor or a merchant silicon semiconductor. Therefore, over time we expect AI processes to be driven by both Nvidia designed chips and custom designed chips from Broadcom and its peers.
On their recent earnings call, Broadcom CEO Hock Tan confirmed that the company’s customers are rapidly pursuing the development of a 1 million XPU cluster of chips. To translate what this means for Broadcom, Hock laid out the Serviceable Addressable Market (SAM) opportunity for the company’s AI revenues over the next 3 years to 2027. In 2024, Hock noted that Broadcom’s SAM was $15-20bn USD, of which the company commanded an approximate 70% share. In 2027, that SAM is expected to grow to $60-90bn USD, and assuming Broadcom captures an approximate 60% share, this gives rise to $50bn USD of AI revenue opportunity for the company over the next 3 years. For the company overall, this means that revenue has the potential to double over the next 3 years. We believe the technology road map outlined by Broadcom and the resulting revenue opportunity gives rise to a multi-year runway of earnings growth backed by a large structural change.”
2) Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
5-year Sales Growth: ~22.02%
TTM net income: $35,710.5 Million
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. Bernstein analysts gave a positive outlook on the company’s shares, reiterating their “Outperform” rating and a price target of $258.00. The firm’s analysts lauded Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s strong positioning in the semiconductor industry, mainly in the data-center AI sector, which can become a significant growth driver through 2025.
As per Bernstein, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is expected to benefit from the growing demand for high-bandwidth memory (HBM), which can tighten the capacity for mainstream memory production. The analysts at the company expect a positive shift in the memory sector around the middle of the year, courtesy of strong AI and HBM demand. Notably, AI has emerged as a significant growth driver for the company, with strong performance anticipated to continue into 2025. In Q1 2025, the company expects its business to be impacted by smartphone seasonality, which can be partially offset by continued growth in AI-related demand.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) expects revenue of between US$25.0 billion and US$25.8 billion in Q1 2025. Wedgewood Partners, an investment management company, released its Q4 2024 investor letter. Here is what the firm said:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was another top contributor to performance during the quarter and for the year. The Company’s earnings growth dramatically accelerated compared to last year as the Company’s wafer fabrication and packaging volumes soared in 2024. In addition, the Company customer prices rebounded in the face of more normalized capital expenditures. The Company maintains a near-monopoly in the fabrication of nearly every new AI accelerator brought to market over the past two years. They continue investing tens of billions to build and fill future capacity with orders for what seems to be insatiable hyperscale demand for accelerated computing. The stock ended the year trading at a consensus forward earnings multiple that is several points lower than large cap growth benchmarks, despite the Company’s dominant position in the most important industry that is driving one of the largest technological shifts in a generation.”
1) NVIDIA Corporation (NASDAQ:NVDA)
5-year Sales Growth: ~62.43%
TTM net income: $63,074 Million
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is a renowned player in the semiconductor business and is known for innovative GPUs and expanding portfolio of products for AI, gaming, and data centers. As per Barclays analyst Tom O’Malley, NVIDIA Corporation (NASDAQ:NVDA) GPU sales touched ~$100 billion in calendar 2024 and are projected to grow to ~$160 billion in calendar 2025. The analyst further added that custom silicon has just started to become more significant and is expected to grow at a faster compounded rate over the upcoming 3 years (at 55%).
Considering the ongoing focus on the AI compute end-market, the analyst remains optimistic about NVIDIA Corporation (NASDAQ:NVDA)’s growth prospects. For calendar 2025, the analyst anticipates the company to grow its data-center compute business by ~60% YoY. Therefore, Tom O’Malley reiterated an “Overweight” rating and upped his price target to $175 from $160 on the company’s shares.
Furthermore, NVIDIA Corporation (NASDAQ:NVDA)’s strong position in the AI computing market offers a strong foundation for continued growth. Its comprehensive technology stack, which includes hardware and software solutions, provides a significant advantage in catering to the growing demand for AI infrastructure. Infuse Asset Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“We do still own some NVIDIA Corporation (NASDAQ:NVDA) as the forward multiple isn’t egregious and it powers over 90% of AI workloads. This company is only becoming increasingly important though the hyperscalers are actively trying to save money through their own ASIC programs. The moat CUDA provides has been underestimated time and time again. While I don’t think Nvidia has quite the upside as some of the other companies in the portfolio, it has a product that the best companies in the world literally can’t get enough of.”
While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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