Investors have lately been rotating out of tech stocks and taking refuge in defensive assets, as a surge in oil prices owing to the continued tensions in the Middle East has raised fears of inflation rising further. However, the enthusiasm surrounding artificial intelligence has continued to help AI-focused companies.
High demand for AI chips has been boosting semiconductor stocks, which have primarily been responsible for the broader market rally over the past three years. Given this scenario, it would be ideal to invest in semiconductor stocks, such as Analog Devices ADI, NXP Semiconductors NXPI, Microchip Technology MCHP, Texas Instruments TXN and ASML Holding N.V. ASML, which have great potential for growth this year.
Semiconductor Revenues Surging Steadily
Global semiconductor sales totaled $110.5 billion in April, jumping 11% sequentially from March’s total of $99.5 billion, the Semiconductor Industry Association (SIA) reported. Year over year, semiconductor sales soared 93.9% $56.9 billion in April 2025.
“Global semiconductor sales increased on a month-to-month basis for the 14th consecutive month in April, and the global market continues to notch robust year-to-year growth driven by sales into the Asia-Pacific region, the Americas, and China,” John Neuffer, SIA president and CEO, said.
The robust jump in April follows a stellar first quarter when semiconductor sales totaled $298.5 billion, increasing 25% sequentially.
Semiconductors have become a key part of nearly every modern and developing technology, from IoT and 6G to artificial intelligence. Growing demand from the automotive sector has also helped boost chip sales. Meanwhile, the fast-growing AI market — which is still in its early stages — is prompting major technology companies to invest billions of dollars in development and infrastructure.
With big tech firms continuing to spend aggressively on AI infrastructure, investor confidence in semiconductor companies has remained strong.
The SIA also backed the World Semiconductor Trade Statistics’ (“WSTS”) Spring 2026 global semiconductor sales forecast. The WSTS projects the global semiconductor market to grow 90% this year, reaching $1.51 trillion.
5 Semiconductor Stocks With Upside
Analog Devices
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal and digital signal processing (“DSP”) integrated circuits. ADI’s product line comprises amplifiers and comparators; analog to digital converters; digital to analog converters; video encoders and decoders; embedded processing products and DSPs; MEMS and temperature sensors; RF/IF components and converters; power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors. Analog Devices also offers analog, digital and RF switches and multiplexers; analog microcontrollers; clock and timing products.
Analog Devices’ expected earnings growth rate for the current year is 59.3%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the past 60 days. ADI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NXP Semiconductors
NXP Semiconductors provides high-performance, mixed-signal and standard product solutions that leverage its RF, analog, power management, interface, security and digital processing expertise. NXPI seems well-positioned to capitalize on the level 2-5 automotive market. Additionally, NXP Semiconductors is the leader in general-purpose microcontrollers and application processors in industrial and IoT markets.
NXP Semiconductors’ expected earnings growth rate for the current year is 25.1%. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 60 days. NXPI carries a Zacks Rank #2 at present.
Microchip Technology
Microchip Technology has been consistently benefiting from its strength in the analog and microcontroller businesses. MCHP’s dominance in 8, 16, and 32-bit PIC microcontrollers remains a major driver of top-line and bookings growth. Microchip Technology has acquired notable companies like Tektronix, Microsemi and Atmel to add strength to its product offerings.
Microchip Technology’s expected earnings growth rate for the current year is 84.2%. The Zacks Consensus Estimate for current-year earnings has improved 18% over the past 60 days. MCHP currently has a Zacks Rank #1.
Texas Instruments
Texas Instruments is an original equipment manufacturer of analog, mixed-signal and digital signal-processing integrated circuits. TXN has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia and Europe. Management strategy has been to build assets that would be fully utilized through their lifetimes and outsource any excess demand in peak situations to outside foundries.
Texas Instruments’ expected earnings growth rate for the current year is 40.6%. The Zacks Consensus Estimate for current-year earnings has improved 20.6% over the past 60 days. Currently, TXN carries a Zacks Rank #2.
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Analog Devices, Inc. (ADI): Free Stock Analysis Report
Texas Instruments Incorporated (TXN): Free Stock Analysis Report
ASML Holding N.V. (ASML): Free Stock Analysis Report
Microchip Technology Incorporated (MCHP): Free Stock Analysis Report
NXP Semiconductors N.V. (NXPI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).