3 Chip Stocks Crushing the Market With More Room to Run

Stocks to buy

The semiconductor field evolves rapidly, requiring yearly product upgrades. It’s a complex, costly and vital industry, particularly in the AI and Web 3.0 era, offering growth and security opportunities for top-performing companies. Accordingly, the top chip stocks to buy now continue to outperform, as barriers to entry amplify these market share advantages.

In this article, I will discuss three of the chip stocks to buy now that are crushing the market and still have plenty of room to run.

Nvidia (NVDA)

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Nvidia (NASDAQ:NVDA) plays a vital role in the AI-driven computing shift, leveraging GPUs for accelerated computing. This has driven rapid revenue growth and a 190% year-to-date stock price increase.

Nvidia, once famous for its GPUs, now leads digital innovation in multiple sectors. The company has posted impressive financial results with quarterly sales hitting $13.5 billion, a remarkable 101.5% annual growth rate. Nvidia’s IV spectrum shows complexity: lower end activity for protection, surges from $500 to $980 signal optimism. Additionally, a number of large trades for high-upside call bets have been placed by institutional giants. Analysts are bullish, with an average target of $636.32 (45% upside). A bolder view targets $1,100 (150.57% potential gain), for those who believe these smart money investors are right.

Notably, Nvidia is a company that’s not only beating expectations on the top-line, but also by 63 cents per share in profits. Additionally, Nvidia’s Omniverse platform stands out, going beyond a typical metaverse platform.

For those thinking long-term, there are plenty of growth catalysts to support additional upside with Nvidia from here, making it a great option in chip stocks to buy now.

Advanced Micro Devices (AMD)

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While Nvidia gets attention, Advanced Micro Devices (NASDAQ:AMD) is making strides in AI chips with its Instinct MI300X GPUs. AMD has secured substantial supply chain commitments, and customer interest in its AI offerings surged, with a seven-fold increase in AI cluster engagements last quarter.

PC demand might rise during the holiday season, but significant growth isn’t expected until the 2025 replacement cycle. AMD is a long-term hold, a key rival to Nvidia in AI data center GPUs, with Intel lagging. AMD is also expanding into embedded computing for IoT devices.

Despite August’s inflation concerns, AMD is rebounding with a 4% gain since September 11, 2023. Its Mipsology acquisition enhances AI capabilities and partnerships for automotive safety, using AMD’s system-on-a-chip, offering long-term growth potential.

Intel Corp (INTC)

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Intel’s (NASDAQ:INTC) growth strategy emphasizes AI as a “superpower” across diverse applications, aiming to lead in the expanding AI market. The company’s bold strategy is paying off and it’s on track to regain chip manufacturing leadership by releasing the advanced Intel 18A process node ahead of schedule, attracting significant interest from a mystery customer, possibly Apple (NASDAQ:AAPL) or Arm Holdings (NASDAQ:ARM).

Intel’s AI chips, competitively priced and in high demand, could challenge Nvidia’s offerings, potentially leading to substantial revenue and profits. It anticipates benefiting from the growing demand for PCs optimized for AI applications. They are expanding manufacturing capacity with investments in facilities in Germany and a new assembly and test facility in Poland.

Moreover, Intel’s IDM 2.0 strategy involves investments to strengthen its semiconductor position and foundry business. Intel Foundry Services (IFS) enhances its role in the AI market, diversifying the global supply chain with leading-edge capacity beyond Asia.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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