NVDA: 3 Semiconductor Innovators Powering Tomorrow’s Technologies

The semiconductor industry lies at the heart of technological advancement, powering everything from smartphones to artificial intelligence systems. The demand for advanced chips continues to surge, and semiconductor innovators are driving progress by creating faster, more efficient, and more specialized processors.

Therefore, you might consider keeping an eye on three fundamentally strong semiconductor innovators, namely, NVIDIA Corporation (NVDA), Broadcom Inc. (AVGO), and QUALCOMM Incorporated (QCOM).

In recent years, the semiconductor industry has witnessed robust transformation. The shift in demand for semiconductors is due to the integration of artificial intelligence and machine learning.

Companies are developing specialized chips designed to handle complex computations more efficiently, which are essential for training and deploying AI models at scale. The infusion of AI into semiconductor design processes marks a new era of efficiency, innovation, and reliability.

Extreme ultraviolet (EUV) has enabled companies in this sector to continue Moore’s Law, that is, enabling companies to produce chips with higher transistor densities, improving performance while reducing energy consumption. The future of semiconductor manufacturing lies in the refinement of these advanced lithography techniques, ensuring that the industry continues to meet the ever-growing demands of the digital age.

Governments worldwide are investing heavily in domestic semiconductor manufacturing to secure supply chains and reduce dependence on foreign suppliers. Additionally, the global semiconductor market is projected to expand to $2.06 trillion by 2032, exhibiting a CAGR of 14.9%.

Considering these favorable market trends, let’s look at the fundamentals of the top three Semiconductor & Wireless Chip stocks, starting with the third pick.

Stock #3: NVIDIA Corporation (NVDA)

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NVDA provides graphics, computing, and networking solutions internationally. It operates through two segments: Graphics and Compute & Networking. The company offers products that are used in gaming, professional visualization, data center, and automotive markets.

On January 16, NVDA released new NIM microservices for AI guardrails that are portable, optimized inference microservices that help companies improve the safety, precision, and scalability of their generative AI applications. This makes them ideal for scaling AI applications in industries such as healthcare, automotive, and manufacturing in locations like hospitals or warehouses.

On January 13, NVDA joined hands with IQVIA, the world’s leading provider of clinical research services, commercial insights, and healthcare intelligence, to build custom foundation models and agentic AI workflows that can accelerate research, clinical development, and access to new treatments. NVDA’s AI blueprint can help IQVIA unlock and automate complex, time-consuming tasks, allowing healthcare professionals to focus on strategic decision-making and human interaction.

During the third quarter that ended on October 27, NVDA’s revenue increased 93.6% year-over-year, amounting to $26.16 billion. It posted a non-GAAP operating income of $23.28 billion, indicating a 101.4% increase from the prior-year quarter.

In addition, NVDA’s non-GAAP net income stood at $20.01 billion, up 99.7% year-over-year, while its non-GAAP earnings per share grew 102.5% from the year-ago value to $0.81. Also, its free cash flow rose 138.4% from the year-ago value to $16.79 billion.

According to the company’s outlook for the fourth quarter fiscal 2025, NVDA projects revenue of $32.50 billion, plus or minus 2%.

Analysts expect NVDA’s revenue for the fourth quarter (ending January 2025) to increase 72.1% year-over-year to $38.04 billion, while its EPS for the same period is expected to grow 63.8% from the prior year to $0.85. Moreover, it topped Street revenue and EPS estimates in each of the trailing four quarters, which is excellent.

The stock has gained 151.2% over the past year and 67.6% over the past nine months to close the last trading session at $140.83.

NVDA’s stance is apparent in its POWR Ratings. The stock has an A grade for Sentiment and a B for Quality. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

Among the 90 stocks in the Semiconductor & Wireless Chip industry, it is ranked #35. Click here to see the additional NVDA ratings (Growth, Value, Momentum, and Stability).

Stock #2: Broadcom Inc. (AVGO)

AVGO is a global technology company that designs, develops, and supplies a broad range of semiconductors, focusing on complex digital and mixed signal complementary metal oxide semiconductor-based devices and analog III-V-based products. The company operates through two segments: Semiconductor Solutions and Infrastructure Software.

On January 15, AVGO launched the Brocade G710 24-port 64G switch, the industry’s most responsive and highly efficient SAN switch for rack-based infrastructure. This launch is easy to deploy and manage while delivering the reliability, security, and performance customers demand. It is the most energy-efficient Fibre Channel switch in the industry, strengthening AVGO’s position in the market.

On December 10, AVGO introduced Bitnami Premium, a commercial enterprise version of Bitnami by VMware Tanzu, and it also named Arrow Electronics as its global distributor. This new enterprise will help customers accelerate their application delivery with easy access and enhanced security features.

AVGO’s total net revenue for the fourth quarter (ended November 3, 2024) increased 51.2% year-over-year to $14.05 billion. Its non-GAAP operating income is $8.81 billion, indicating a 53.3% growth from the prior year’s quarter. AVGO’s net income came in at $4.32 billion and $0.90 per share, up 22.7% and 8.4% year-over-year, respectively. The company’s adjusted EBITDA increased 50.3% from the year-ago value to $9.09 billion. Also, its free cash flow grew 16.1% from the same period last year to $5.48 billion.

Looking ahead, AVGO anticipates revenue for the fiscal first quarter of 2025 to be approximately $14.60 billion and adjusted EBITDA of approximately 66% of projected revenue.

Street expects AVGO’s revenue for the fiscal first quarter (ending January 2025) to increase 22.2% year-over-year to $14.62 billion. Its EPS for the same period is expected to register a 37.2% growth from the prior year, settling at $1.51. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters, which is promising.

AVGO shares have surged 117.7% over the past year and 87.4% over the past nine months to close the last trading session at $240.31.

AVGO’s fundamentals are reflected in its POWR Ratings. The stock has a B grade for Growth, Sentiment, and Quality. It is ranked #20 out of 90 stocks in the same industry.

Beyond what is stated above, we’ve also rated AVGO for Value, Momentum, and Stability. Get all AVGO’s ratings here.

Stock #1: QUALCOMM Incorporated (QCOM)

QCOM engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI).

On January 7, QCOM and Sony Honda Mobility Inc. (SHM) announced the expansion of their technology collaboration to integrate the latest generation of Snapdragon® Digital Chassis™ solutions into its future AFEELA vehicles. This collaboration aims to enhance the next generation of AFEELA vehicles with cutting-edge features, including edge generative artificial intelligence (GenAI), and bring new advancements in the development of software-defined vehicles.

In the same month, the company and Mahindra & Mahindra Ltd. announced their technology collaboration to revolutionize the future of EVs in India. In this collaboration, Mahindra’s first electric vehicle will be powered by QCOM’s next-generation Snapdragon Cockpit Platform, which enables AI-driven safety features, while the Snapdragon Auto 5G Modem-RF solution supports seamless 5G connectivity and premium in-vehicle experiences.

In the fourth quarter (ended September 29, 2024), QCOM’s revenues increased 18.7% year-over-year to $10.24 billion. The company reported a non-GAAP operating income of $3.51 billion, indicating a 31.4% growth from the prior year’s quarter. QCOM’s non-GAAP net income came in at $3.04 billion, up 33.3% year-over-year, while its net income per share grew 33.2% from the prior-year quarter to $2.69.

The consensus revenue estimate of $10.88 billion for the fiscal first quarter (ended December 2024) represents a 9.7% increase year-over-year. The consensus EPS estimate of $2.96 for the about-to-be-reported quarter indicates a 7.6% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

Over the past year, the stock has surged 20.1%, closing the last trading session at $167.27.

QCOM’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

It also has an A grade for Quality and a B for Value. Within the Semiconductor & Wireless Chip industry, it is ranked first. Click here to see QCOM’s ratings for Growth, Momentum, Stability, and Sentiment.

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NVDA shares were trading at $147.56 per share on Wednesday afternoon, up $6.73 (+4.78%). Year-to-date, NVDA has gained 9.88%, versus a 3.64% rise in the benchmark S&P 500 index during the same period.