Top 2025 Semiconductor Trades: Buy NVIDIA & TSM, Skip AMD

Semiconductor Market Overview - The global semiconductor market is expected to expand significantly by 2025, driven by increased demand for IoT devices, digitalization of economies, and heavy investments in semiconductor manufacturing hubs [1] - Global semiconductor revenues are projected to reach $702.40 billion in 2025, up from $607.41 billion in the previous year, with a CAGR of 8.70% leading to $980.80 billion by 2029 [2] - The integrated circuits market will be the primary revenue driver, followed by discrete semiconductors, optoelectronics, and sensors and actuators [2] - The iShares Semiconductor ETF (SOXX) has gained 9.2% year-to-date, following a 12.2% increase last year, indicating strong momentum in the sector [3] NVIDIA Corporation (NVDA) - NVIDIA is positioned for growth due to strong demand for both its newer Blackwell chips and older Hopper chips, with Blackwell chips offering enhanced energy efficiency and a 30x faster AI interface [5] - The company holds a dominant global market share in the GPU space, with the GPU market expected to grow from $75.77 billion in 2024 to $101.54 billion in 2025 [6] - NVIDIA's EPS is projected to increase by 46.3% year-over-year, with a Zacks Consensus Estimate of $2.94 and a Zacks Rank 2 (Buy) [7] Taiwan Semiconductor Manufacturing Company (TSMC) - TSMC's dominance in the global foundry market is expected to drive its stock performance, supported by strong demand for its custom AI chips and pre-orders for its 2nm chips, which have exceeded demand for its 3nm and 5nm chips [9] - The company's EPS is estimated to increase by 21% year-over-year, with a Zacks Consensus Estimate of $9.12 and a Zacks Rank 2 (Buy) [10] Advanced Micro Devices (AMD) - AMD's stock performance has been weak over the past five years due to challenges in the personal computer market, exacerbated by the pandemic, and its inability to capitalize on the AI trend compared to NVIDIA [11] - The company's reliance on revenues from outside the U.S. exposes it to exchange rate fluctuations, further impacting its near-term prospects [12] - AMD currently holds a Zacks Rank 4 (Sell), indicating a less favorable outlook compared to NVIDIA and TSMC [12]