Semiconductors have been some of the best-performing stocks in the market over the last few years. This is due to the fact that new technologies such as artificial intelligence (AI) and robotics are driving strong demand for chips.
Interested in adding some semiconductor stocks to your portfolio in 2026? Here are five names to check out.
Nvidia
It’s hard to talk about the best semiconductor stocks and not mention Nvidia (NVDA:NASDAQ). It’s the largest player in the industry by a wide margin and it dominates the market for AI chips with its high-powered graphics processing units (GPUs).
This company has had a huge amount of success in recent years amid the emergence of generative AI technology. Over the last three financial years, its revenue has climbed from $27 billion to $216 billion.
Looking ahead, analysts expect further growth as hyperscalers such as Amazon and Microsoft spend billions on AI infrastructure. This financial year, its revenue is expected to hit $394 billion.
This projected growth does not seem to be reflected in the company’s valuation, however. Looking at earnings forecasts for next financial year, Nvidia’s P/E ratio is only 15.
At that earnings multiple, the stock looks undervalued. Taking a medium-term view, there’s significant upside potential.
It’s worth noting that Wall Street analysts are very bullish on Nvidia at present. Currently, the average 12-month price target is $297, which is about 55% above today’s share price.
Broadcom
While Nvidia is the clear market leader in the AI chip space, Broadcom (AVGO:NASDAQ) has been gaining share in recent years. It’s a specialist in custom chips (XPUs), making products for the likes of Google, Meta Platforms, and Anthropic.
Like Nvidia, it’s seeing prolific growth today as hyperscalers spend on AI. This financial year, its revenue is expected to rise approximately 65% year on year to $106 billion.
This growth is available at a very reasonable price, however. Looking at the earnings forecast for the financial year starting 1 November, the stock’s forward-looking P/E ratio is under 20.
At present, the average analyst 12-month price target is $512. That’s nearly 40% above the current share price.
Marvell Technology
Another company that’s having success on the custom chip front is Marvell Technology (MRVL:NASDAQ). It’s a smaller semiconductor company with a market cap of around $140 billion versus $4.6 trillion for Nvidia and $1.8 trillion for Broadcom.
As well as making custom chips, Marvell offers optical interconnects and networking solutions designed to move data quickly. Here, it’s a market leader in chips that convert electrical signals from computers into light signals to shoot data through fibre-optic cables at super-fast speeds.
For the financial year ending 31 January 2027, Marvell is expected to generate revenue of $11.5 billion. That would represent an increase of about 40% year on year.
As for the valuation, the P/E ratio is 28. Relative to the level of growth being generated, that seems reasonable.
It’s worth noting that Nvidia CEO Jensen Huang recently said that Marvell could potentially be a $1 trillion dollar company one day. So, this is definitely a chip stock to watch.
The average price target is $252. That’s more than 50% above the current share price.
Taiwan Semiconductor Manufacturing Company
Those looking for more of a diversified play on the semiconductor industry may wish to take a look at Taiwan Semiconductor Manufacturing Company (TSM: NYSE). It’s the largest semiconductor manufacturing company in the world.
The beauty of this company is that it can do well no matter whose chips are in demand. Ultimately, it’s a play on the entire semiconductor ecosystem rather than a bet on any single design or brand.
Last year, Taiwan Semi’s revenue hit TWD 3.8 trillion, up from TWD 2.3 trillion three years earlier. This year, revenue is projected to hit TWD 5.2 trillion.
Looking at the earnings forecast for 2027, the forward-looking P/E ratio here is around 20. At that earnings multiple, the stock looks attractively priced.
Lam Research
Finally, check out Lam Research (LRCX:NASDAQ). It makes highly specialised machinery that’s crucial for the manufacturing of advanced semiconductors.
This company should do well in the years ahead as companies like Taiwan Semi, Intel, and Samsung build more chip manufacturing plants. It should also do well as demand for high-bandwidth memory (HBM) rises since the production of HBM requires complex processes that it specialises in.
It’s worth noting that selling multi-million-dollar chip manufacturing machines is only part of Lam’s business. Once Lam’s tools are installed on factory floors, chipmakers pay the company continuously for spare parts, servicing, and technical upgrades to keep factories running 24/7.
After the recent pullback in chip stocks, Lam’s valuation is looking more attractive – the P/E ratio has fallen to 33. The average price target is $372, which is nearly 40% above the current share price.
Disclosure: Edward Sheldon owns shares in Nvidia, Broadcom, Lam Research and Marvell Technology
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
Widely recognised as a sought-after investment expert, Edward’s insightful perspectives and analyses have been featured on sites such as BlackRock, Credit Suisse, WisdomTree, Motley Fool, eToro, and CMC Markets, among others.
