Nasdaq's Picks for Semiconductor Stocks: Buy, Hold, or Sell
Semiconductor stocks are in a slump right now, but that might mean a chance for investors to buy them at a better price. However, not all chip companies are in the same situation, so it's important to be picky when choosing. Nasdaq offers a breakdown of three chip stocks to consider: one to buy, one to keep, and one to let go of, based on what's happening in the market.
If you're looking for a chip stock to invest in during this market dip, Nvidia is the top choice. Right now, the stock is trading at a forward P/E of 15 times fiscal 2028 estimates, which makes it look like a good value. One of the biggest reasons Nvidia stands out is its CUDA software platform. This platform is widely used for training AI models and became the go-to standard for writing original AI code after it gained popularity in early research labs.
Nvidia's Leadership and Strategic Moves
Under the leadership of CEO Jensen Huang, Nvidia has shown an ability to anticipate where the tech market is going. A key example is the 2020 acquisition of Mellanox, which helped set up the company's networking capabilities. More recently, the 'acquisitions' of Groq and SchedMD have shown that Huang keeps making moves that position the company for future growth. Because of this, many see Nvidia as a smart long-term investment, particularly as the broader sector experiences a pullback.
Advanced Micro Devices (AMD) is another name in the semiconductor field that's worth keeping in your portfolio. The company is benefiting from two major trends: one is called inference computing, where the speed of data access matters more than raw processing power. AMD’s chiplet design allows it to build processors with more memory, which is a key asset in this area. It has already secured major deals with companies like OpenAI and Meta Platforms, which has helped expand its presence in the inference space.
AMD's Growing AI Presence
AMD is also gaining ground in what's known as agentic AI. This is a growing field where AI systems are being used for more complex, independent tasks. The company’s server CPUs are particularly well-suited for this, and the demand for high-performance CPU chips is surging. AMD estimates the agentic AI market could hit $220 billion in the coming years. It has also formed partnerships with Anthropic and Microsoft, which are using AMD's GPUs and Helios systems to support their AI work.
While AMD is growing fast, the same can't be said for Intel. Nasdaq suggests that Intel is a stock to sell now. The company has been performing better lately in the AI segment, but it doesn't look like they’ve been leading the charge—more like a lucky rider. For example, the recent boost in data center CPU demand gave Intel a temporary advantage, but it had been losing ground to AMD and ARM-based CPUs before this. The foundry part of the business is still struggling and continuing to report losses.
Intel's Diminishing Position
Intel’s stock is no longer the bargain it once was. With it rising in price recently, investors might want to take some profits and move on. The company doesn't look as competitive compared to more aggressive players like AMD and Nvidia, and its current valuation may be too high for the potential it offers.
For investors thinking about where to put their money in the semiconductor world, Nasdaq has highlighted three key stocks to watch. Nvidia is a buy because of its strong position in AI infrastructure. AMD is a hold due to its promising growth in inference and agentic AI. Intel is a sell because it lacks the leadership and momentum that make the other two companies more attractive right now.
By understanding where each of these companies stands, investors can make smarter choices in a market that’s still evolving. The semiconductor industry is in a period of transition, and knowing which players are leading and which are following could help shape a more successful investment strategy.