Investing in the stock market is much like wandering through a maze, particularly in a space that is subject to numerous changes – technology. Have you started thinking about where to set your sights in 2025? The Bank of America brings some suggestions by highlighting six of those semiconductor stocks that really stand out and are expected to drive considerable growth during the next year. Such companies might be worth adding to your portfolio-from AI innovations to automotives to industrial applications.
What are the six tech stocks Bank of America recommends?
If you are looking for guidance on investing in tech stocks for 2025, Bank of America has spotlighted six semiconductor companies that they believe have strong growth potential. These stocks are centered around artificial intelligence (AI), memory sales, and industrial applications. Here are the top picks:
- NVIDIA (NVDA): A leader in AI semiconductors, NVIDIA’s Blackwell deployments and its sustained momentum in AI investments make it a standout.
- Broadcom (AVGO): With its robust portfolio in AI infrastructure, Broadcom is expected to benefit from continued enterprise innovation.
- Marvell Technology (MRVL): Positioned as a key player in data centers, Marvell’s focus on cloud services bolsters its growth prospects.
- Lam Research (LRCX): Known for its dominance in flash-memory tools, Lam Research is primed for capital expenditure recovery.
- ON Semiconductor (ON): This auto and electric vehicle (EV) chipmaker is expected to see cyclical recovery as global auto production rebounds.
- Cadence Design Systems (CDNS): Cadence stands out for its resilience and double-digit growth, even as the AI hardware market stabilizes.
Read more: Why is Broadcom stock soaring? How much has it jumped?
Why is AI driving the semiconductor market?
Artificial intelligence is reshaping the semiconductor industry, and Bank of America analysts believe this trend will continue into 2025. AI technologies are fueling demand for advanced chips, particularly in cloud computing, enterprise systems, and sovereign deployments. The “arms race” in AI among cloud service providers is a key driver.
Bank of America’s report highlights how NVIDIA, Broadcom, and Marvell are leading the charge. The first half of 2025 is expected to focus on AI-driven growth, while the second half might shift to automotive and industrial applications.
What is the outlook for memory sales in 2025?
Memory sales are another bright spot in the semiconductor market. Bank of America predicts a 20% growth in memory sales for 2025, which builds on the remarkable 79% growth seen in 2024. Companies like Lam Research, with their expertise in flash-memory tools, are well-positioned to capitalize on this trend.
The memory market’s growth is driven by increased demand for storage and computing power, particularly in AI applications and data-heavy industries.
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How are auto and EV sectors influencing chipmakers?
The automotive and electric vehicle industries are becoming increasingly reliant on advanced semiconductors. ON Semiconductor is one of the top beneficiaries of this trend, thanks to its focus on power management and sensing solutions.
According to Bank of America, auto production is set to recover in the latter half of 2025, which could lead to a rebound for automotive chipmakers. This is especially significant as EV adoption accelerates worldwide.
Are smaller semiconductor companies worth considering?
While the six major stocks take center stage, Bank of America’s report also mentions several small to mid-cap companies with growth potential:
- Advanced Energy Industries (AEIS): Upgraded to “Buy” due to expected growth acceleration.
- Ambarella (AMBA): Raised to “Neutral” as the company shows signs of recovery.
- Coherent (COHR), MACOM Technology Solutions (MTSI), and Ceragon Networks (CRNT): These smaller firms are highlighted for their opportunities in networking and optics beyond traditional computing.
What should investors watch for in the second half of 2025?
Bank of America said they are looking towards the later half of the year 2025. Focus, according to them, may just shift towards other sectors, particularly auto and industrial chipmakers, as the AI market becomes more saturated. They advised investors to look out for a possible slowdown in AI silicon growth following two years of exceptional growth.
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Disclaimer
The information provided in this article is for informational purposes only and does not constitute financial advice, investment recommendations, or an endorsement of any particular stock or security. Investing in the stock market carries risks, and the value of investments can go up as well as down. Past performance is not indicative of future results.
We strongly encourage readers to conduct their own research, consider their financial goals, and consult with a licensed financial advisor before making any investment decisions. The newspaper and its authors are not liable for any losses incurred as a result of reliance on the information provided in this article.
