Can These 3 Semiconductor Stocks Lead the Next Tech Rally in 2026?

Core Insights - The equity market's bull run in the past year was primarily fueled by AI, with significant investments in AI-based semiconductor chips that enhance performance in complex problem-solving [1] - The U.S. government has initiated the 2022 Chips Act, allocating $39 billion in direct grants and $75 billion in loans to boost domestic semiconductor production [1] - The One Big Beautiful Bill Act, passed in July 2025, increased tax credits for semiconductor firms to 35% to encourage domestic manufacturing expansion [2] Semiconductor Industry Demand - The demand for semiconductor chips is surging due to the growth in telecommunications, driven by the proliferation of smartphones and the deployment of 5G technology [3] - Continuous network optimization and the transition to cloud services are creating a robust demand for advanced networking equipment and semiconductor chips [5][6] - The adoption of cutting-edge technologies like AI and machine learning is further propelling the need for high-performance semiconductor solutions [6] Company Highlights - NVIDIA Corporation (NVDA) is a leader in visual computing technologies, focusing on AI-based solutions and experiencing increased adoption of its DGX Cloud AI infrastructure [10][11] - MACOM Technology Solutions Holdings, Inc. (MTSI) is benefiting from the demand for higher-speed optical components and military applications, with a focus on advanced RF and optical chips [14][16] - Advanced Micro Devices, Inc. (AMD) is strengthening its position in the semiconductor market with its MI300 series, which supports generative AI workloads and benefits from strong enterprise adoption [18][19] Stock Performance - NVIDIA has gained 32.5% over the past year, with earnings estimates for the current and next fiscal year increasing by 11.5% and 34.7%, respectively [12] - MACOM's stock has risen by 25.9% over the past year, with earnings estimates for the current and next fiscal year moving up by 6.9% and 36.8% [17] - AMD's stock has increased by 66.3% over the past year, with long-term earnings growth expectations of 43.3% [20]