DeepSeek AI revelations were the biggest concern for investors when the month started. Many had started questioning if investing so much in AI infrastructure was worth it. Since then, the market sentiment has turned positive again and many of the stocks have recovered. We are now closing in on the most anticipated earnings call of the year so far: Jensen Huang telling us on 26th February how his company performed in the previous quarter.
Investing in the supply chain of big companies has proven beneficial over the years. As the stronger and the bigger company grows, it helps the smaller companies which are an important part of the supply chain also grow.
The Santa Clara-based chipmaker’s earnings will affect the whole market, not just its suppliers. Analysts expect an earnings beat on both the EPS and revenue. This is what the KeyBanc analysts had to say about the earnings:
“Despite prior concerns regarding constraints associated with the ramp of GB200 NVL servers, we expect NVDA to report strong F4Q results, which we anticipate will solidly beat, and to guide F1Q conservatively and moderately higher than consensus.”
We decided to take a look at companies that will benefit from the above-mentioned earnings beat. To come up with our list of 10 stocks that could skyrocket after Jensen Huang’s earnings call, we looked at stocks that are major suppliers of the company.
10. Keysight Technologies, Inc. (NYSE:KEYS)
Keysight Technologies, Inc. is an electronic design and test solutions provider. The company operates through the Electronic Industrial Solutions Group and Communications Solutions Group segments. It provides electronic design automation software, modular instruments, oscilloscopes, digital multimeters, and other products.
KEYS just signed a virtual power purchase deal with Southern Power to buy renewable energy credits generated by a new solar project in Texas. Its share in the project is expected to produce renewable electricity which will be equal to 100% of its electricity utilization in the U.S. and Canada.
The company made another strategic move recently by acquiring Spirent Communications which has expertise in service assurance and network testing. This will enable the company’s capability to provide end-to-end solutions for complex networking needs including 5G and AI technologies.
As the global AI market is expected to expand at a CAGR of over 35% and reach $2 trillion by 2030, more data centers will be needed to meet this strong demand. Keysight is set to benefit from this investment growth wave.
9. Vertiv Holdings (NYSE:VRT)
Vertiv Holdings is involved in critical infrastructure related to data centers and communication networks. The company specializes in liquid cooling, an energy protocol that has become increasingly relevant since the announcement of Blackwell GPUs, which require modern cooling techniques to run efficiently. This is also what is expected to make the stock more volatile heading into the much-awaited earnings report.
The stock has lost nearly 40% of its value since announcing a disappointing earnings report a couple of weeks ago. It may be too early to write off the company though. Even if the AI spending slows down, there is little doubt that the power-intensive GPUs of the future will continue to rely on Vertiv’s full-stack solutions.
Yes, there is a slowdown in the company’s growth but at these price levels, that is priced in and any boost from Blackwell GPUs can help new investors outperform the broader market with ease.
8. Amkor Technology, Inc. (NASDAQ:AMKR)
Amkor Technology, Inc. is an outsourced semiconductor packaging and test services provider. The company offers system-level and final tests, turnkey packaging and test services, and drop shipment services. It provides its services to original equipment manufacturers, integrated device manufacturers, contract foundries, and fabless semiconductor companies.
The company’s stock fell about 10% right after it reported weak Q4 results on the 10th of February. It reported a 7% year-over-year decline in revenue while adjusted EBITDA was also down 7% YoY. Gross margins stayed at 15.1% marking the highest margins among all four quarters of 2024.
On top of the weak results, the company presented guidance for Q1 2025 which was lower than estimates. It expects a 7% YoY and 22% QoQ decline in revenue going forward, while the gross margins are predicted to reduce to 11.5%, a level not seen in the last decade.
Wall Street analysts expect 2025 to be a much better year for AMKR than 2024. The company is facing some short-term challenges including competitive pressure and geopolitical uncertainty.
“For 2025, we expect our Communications business to be muted in the first half followed by above seasonal growth in the second half. We’re closely collaborating with our strategic customer and are confident in recovering the SiP socket in the next generation iOS phones.”
7. Flex Ltd. (NASDAQ:FLEX)
Flex Ltd. is a manufacturing solutions provider to different brands. The company operates in Flex Reliability Solutions (FRS) and Flex Agility Solutions (FAS) segments. It offers design and engineering, systems integration services, product development, supply chain comprising manufacturing and other services.
The company announced its Q3 2025 results last month registering a solid performance exceeding estimates. The revenue grew 2% YoY while EBIT margins improved by 6.1%. In addition to this, adjusted EPS and free cash flows also showed improvement.
Amidst this strong performance, the company was able to raise its FY2025 EPS guidance from $2.39-$2.51 to $2.57-$2.65. The most bullish aspect of the guidance is the revenue growth in the data center segment. This segment showed an amazing 45% YoY growth in the 3rd quarter and is expected to maintain this growth rate in the ongoing quarter as well.
The company is continuously returning capital to shareholders in the form of buybacks. It bought back almost 10% of its shares in FY2025 so far and is expected to continue doing so in the future. In FY2025, the company is predicted to generate free cash flows worth more than $800 million. If these cash flows are allocated to share buybacks, it would account for approximately 5% of the outstanding shares.
6. Micron Technology, Inc. (NASDAQ:MU)
Micron Technology, Inc. is a storage and memory products developer, designer, manufacturer, and seller. It operates in four segments; Mobile Business Unit, Storage Business Unit, Compute and Networking Business Unit, and Embedded Business Unit. The company distributes its products through independent sales representatives, retailers, direct sales forces, and distributors. The stock got attention recently after Citi maintained its Buy rating and target price of $150 after the company’s 3rd quarter update.
During the Wolfe conference, the company presented important updates related to its FQ3 performance. It lowered its expected gross margins by a few percentage points. According to the CFO, the company expects to clear its current inventory by spring.
Micron saw a significant increase in its revenue as it grew by 84% YoY. The operating income and gross profits also increased. This significant upswing in earnings is supported by strong demand for chips. Though the stock is struggling currently, its unique moat as a supplier of memory products to the semiconductor industry makes it an attractive buy. Currently, GPUs are constrained by bandwidth which means any technological innovation on Micron’s part could significantly alter the future of computing.
5. Intel Corporation (NASDAQ:INTC)
Intel Corporation is a computing and related services and products developer, designer, manufacturer, marketer, and seller. It serves cloud service providers, original design manufacturers, original equipment manufacturers, and other manufacturers and service providers.
The company’s stock showed its best single-day gain in nearly five years by surging 16% recently. This significant increase in the stock price was due to the Wall Street Journal stating that Taiwan Semiconductor Manufacturing (TSM) and Broadcom (AVGO) are exploring deals to split the U.S. chipmaker.
This upward trend was also fueled by rumors about a potential takeover by Intel’s rivals. Regardless of who acquires Intel, its shareholders are likely to get the benefit through improved valuation.
Analysts are bullish on Intel as they think if TSM and AVGO can cope with regulatory issues then it would be a rewarding situation for current investors. While Intel does not have the leadership of the likes of Jensen Huang or Lisa Su, the progress of the other chipmakers will likely force the company to install better leadership, which should be positive for investors.
4. Fabrinet (NYSE:FN)
Fabrinet is an electro-mechanical, optical packaging & precision optical, and electronic manufacturing services provider. It offers different electro-mechanical and advanced optical capabilities for manufacturing processes which include supply chain management, advanced packaging, process design and engineering, and others. The company sells its products and services to modules and subsystems, medical devices, industrial lasers, and other industries.
Fabrinet announced its Q2 earnings result earlier in February which surpassed analyst estimates. The company’s Optical Communications revenue went up by 14% while Non-Optical Communications revenue increased by 29% YoY. Though the gross margins were slightly down from the 1st quarter, it was mainly due to currency instability. Operating margins also improved by 10.6%.
The stock was down 8% in the last month and has not recovered even after strong results. It might be due to the downturn in its datacom segment, which was the key player in the previous gain in the stock. According to the management, the datacom revenue will be down in the next quarter as well. This downturn might reverse gradually but a strong earnings report from the leading GPU maker this week could set the stock on a recovery path.
3. ASE Technology Holding Co., Ltd (NYSE:ASX)
ASE Technology Holding Co., Ltd is an electronic manufacturing and semiconductors testing and packaging services provider. The company constructs, develops, supplies, manages, and leases real estate properties. It also provides equipment leasing, warehousing management, information software, and investment advisory services.
The company recently presented its 1st quarter and full-year guidance for 2025. As per the guidance, in Q1 the company expects its ATM revenue to decline by mid-single digits QoQ, while the gross profit margin is projected to drop by a little more than 1%. In contrast to that, the company predicts mid-single-digit growth in ATM revenue for the complete year. This anticipated revenue growth is supported by the increased demand for leading-edge advanced packaging and testing.
This guidance was based on the recent Q4 earnings which showed a 1% sequential and YoY rise in net revenues. Though the net income of the company was down, it was due to the high operating expenses and currency instability. Operating expenses went up because of the growth in advanced testing and packaging, labor costs, and employee benefits. If Silicon Valley’s leading GPU maker announces positive earnings this week, ASX stock could propel upwards bringing in handsome gains for investors.
2. Applied Materials, Inc. (NASDAQ:AMAT)
Applied Materials, Inc. provides manufacturing software, equipment, and services to display, semiconductor, and other related industries. It operates in Applied Global Services, Semiconductor Systems, and Display segments. The stock is experiencing a downturn after the company reported its Q1 2025 earnings results. Last year’s returns are -9.6% though, nothing to write home about.
AMAT is an integral part of the supply chain of many semiconductor companies, selling equipment and software that are used to manufacture chips. The downturn in the company’s stock may soon reverse if Jensen Huang reports a solid quarter for his company this week. It already reported margin improvement and is expected to continue doing so in the near term as it grows with the rest of the industry.
There are concerns about the company’s ability to generate a healthy cash flow consistently. Its free cash flow declined 75% YoY but with a strong balance sheet consisting of $8.2 billion in cash and equivalents and short-term investments and $6.2 billion in debt, the company’s business isn’t threatened by this deteriorating cash flow.
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Taiwan Semiconductor Manufacturing Company Limited is a manufacturer, tester, packager, and seller of integrated circuits and other semiconductor devices. It also provides customer and engineering support services and investment services and manufactures masks. Apple Inc. is the biggest customer of the chipmaker, with Jensen Huang’s firm coming in second.
With such a big reliance on the number one GPUs in the world, TSM is likely to be the most affected stock from Jensen Huang’s earnings call this week. The Blackwell GPUs are being manufactured at the company’s Taiwan facilities. The earnings call will be dissected for evidence of Blackwell GPU revenues and if they start showing up, TSM stock will respond. However, if the Blackwell GPU execution issues continue, it will bring the uncertainty back.
The execution issues are arising due to the simple fact that not all the data centers are capable of installing these GPUs without the associated equipment also being of similar high standards. Investors must note, however, that any such impact will be short-term, as there is no other company in the world that can manufacture these high-end products. The revenue may be delayed, but it will come.
Taiwan Semiconductor Manufacturing Company Limited is 6th on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 186 hedge fund portfolios held TSM at the end of the fourth quarter which was 158 in the previous quarter. While we acknowledge the potential of TSM as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article was originally published at Insider Monkey.
