From Nasdaq: 2025-01-17 05:15:00

The semiconductor industry experienced a 19% growth to $630 billion in 2024, rebounding from a 12% decline in 2023. Expectations are high for another year of double-digit growth, reaching $717 billion in 2025. Data center operators are driving demand for AI chips for large language models.

AI chips are set to see increased adoption in edge devices like smartphones and PCs in 2025, boosting the chip market further. Companies like AMD and Qualcomm are poised to benefit from the surge in sales of AI-capable edge devices, with dedicated AI engines for on-device AI workloads.

AMD and Qualcomm are expanding their portfolios with AI-capable processors for consumer and commercial markets. Qualcomm is targeting the generative AI smartphone market, while AMD’s Ryzen AI processors are set to power next-generation AI PCs. Both companies are trading at attractive valuations.

AI servers are expected to see significant investment growth to $298 billion in 2025, driving demand for AI chips like Nvidia’s Blackwell GPUs. Nvidia is expanding production capacity to meet customer demand and is projected to generate $171 billion in data center revenue in fiscal 2026.

Analysts are bullish on Nvidia’s revenue potential for fiscal 2026, with estimates significantly higher than previous years. With increased AI chip manufacturing capacity, Nvidia’s growth prospects look strong. The company is trading at an appealing valuation compared to the Nasdaq-100 index.

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Read more at Nasdaq: Prediction: These 3 Artificial Intelligence (AI) Chip Stocks Will Crush the Market in 2025