The world’s leading technology companies are investing heavily in building data centers and filling them with GPUs designed for AI development. Companies like Microsoft, Amazon, Alphabet, Meta Platforms, and Oracle are spending billions on AI capex, with plans to spend even more in the coming year. This presents a significant opportunity for the semiconductor industry.
One of the top chip stocks to buy heading into 2025 is Nvidia, the leader in data center GPUs. The company is set to launch a new generation of chips based on its Blackwell architecture, which will offer substantial improvement in cost efficiency for developers. Nvidia is expected to see significant revenue growth in fiscal 2025, making it a promising investment for investors willing to hold the stock for the next 18 months.
Micron Technology is a leading supplier of memory and storage chips for data centers, PCs, and smartphones. The company’s latest HBM3E units for the data center deliver more capacity and consume less energy, meeting the growing demand for memory capacity in AI settings. Micron’s revenue surged in its recent fiscal quarter, and the company is forecasting more strength to come.
Axcelis Technologies, a provider of ion implantation equipment, is benefitting from the growing demand for power devices in AI data centers. The company’s equipment is critical to the fabrication process for CPUs, memory chips, and power devices. Axcelis’ guidance suggests that 2025 could be its strongest year yet, with a potential record revenue of $1.3 billion.
Broadcom is a multifaceted AI organization with a focus on semiconductors for hyperscale customers. The company’s AI accelerators and Ethernet switches are experiencing significant demand from companies building AI infrastructure. Broadcom is expected to deliver strong revenue growth in fiscal 2024, putting it on track to potentially join the exclusive $1 trillion club.
Advanced Micro Devices (AMD) is competing with Nvidia in the data center segment with its MI300 GPU. The company is gearing up to release a faster GPU called the MI350 next year, based on a new architecture that could compete directly with Nvidia’s Blackwell lineup. AMD is already a leader in AI chips for personal computing and is expected to see continued growth in the data center segment.
