NVIDIA and TSMC Shine in Semiconductor Market Growth

NVIDIA and TSMC are strong buy recommendations as 2025 looks promising for the semiconductor market, driven by increasing demand and innovation. Analysts suggest investors focus on these two stocks while avoiding AMD for now.

Date: 28-01-2025

AI Rating: 7

Earnings Per Share (EPS)
NVIDIA's EPS is expected to rise significantly, with the Zacks Consensus Estimate of $2.94 reflecting a 46.3% increase from the previous year. TSMC also shows promise, with its EPS estimated to increase by 21%.

Market Outlook
The semiconductor market is projected to grow from $607.41 billion in 2024 to $702.40 billion in 2025, marking an increasing trend in revenue, driven by the demand for IoT devices and advancements in semiconductor technology. The momentum for semiconductor stocks, particularly the iShares Semiconductor ETF, which has gained 9.2% year-to-date, indicates broader market positivity.

Comparative Performance
NVIDIA and TSMC are highlighted for their strong performances and competitive advantages within the sector. NVIDIA's market share in GPUs is poised for growth as demand for their cutting-edge chips surges. Conversely, AMD is advised to be avoided due to weak performance and increasing challenges against competitors like NVIDIA and TSMC, which could negatively impact investor sentiment towards AMD's stock.

Concluding Thoughts
The robust estimates for both NVIDIA and TSMC in terms of EPS, combined with strong market projections and innovations, position these companies favorably in the eyes of investors. In contrast, AMD's struggles could lead to decreasing investor confidence and negative stock performance.

Stocks: NVDA TSM AMD AVGO INTC SOXX