AI Powering Semiconductor Sales: 4 Stocks to Boost Your Portfolio
The dream run for the semiconductor industry continues in 2026, with sales multiplying in each of the first five months of the year. Continued enthusiasm surrounding artificial intelligence has been powering demand for semiconductors, resulting in a robust jump in revenues.
Given this scenario, it would be ideal to invest in semiconductor stocks, such as Analog DevicesADI, Microchip TechnologyMCHP, Texas InstrumentsTXN and Taiwan Semiconductor Manufacturing Company LimitedTSM, which have great potential for growth this year.
Dream Run for the Semiconductor Industry
Global semiconductor sales totaled $120.6 billion in May, growing 9.2% sequentially from April’s total of $110.5 billion, the Semiconductor Industry Association (SIA) reported on Monday. On a year-over-year basis, sales surged a whopping 104.1% from May 2025’s total of $59.1 billion.
Semiconductor sales have now increased in all five months of the year, recording their 15th straight month of gains. John Neuffer, SIA president and CEO, said, “The global semiconductor market continued to grow substantially in May, hitting the highest-ever recorded monthly sales total and increasing on a month-to-month basis for the 15th consecutive month in May.”
AI-focused semiconductors have been taking a beating lately as concerns grow over their sustainability. Investors have been rotating out of semiconductor stocks and taking refuge in defensive picks.
However, the decline appears to be temporary as Wall Street has witnessed similar tech and semiconductor sell-offs in the past. Even then, semiconductor stocks have been responsible for the broader market rally over the past few years.
The jump in May and April follows a stellar first quarter for the semiconductor industry. Semiconductor sales totaled $298.5 billion in the first quarter, up 25% sequentially.
Semiconductors have become essential to almost every modern and emerging technology, powering everything from the Internet of Things (IoT) and 6G networks to artificial intelligence.
Rising demand from the automotive industry has further strengthened chip sales. At the same time, the rapidly expanding AI market, which is still in its early growth phase, is driving leading technology companies to invest billions of dollars in AI development and infrastructure.
As these firms continue to ramp up spending on AI infrastructure, investor optimism toward semiconductor stocks has remained strong.
4 Semiconductor Stocks With Upside
Analog Devices
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal and digital signal processing (“DSP”) integrated circuits. ADI’s product line comprises amplifiers and comparators; analog to digital converters; digital to analog converters; video encoders and decoders; embedded processing products and DSPs; MEMS and temperature sensors; RF/IF components and converters; power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors. Analog Devices also offers analog, digital and RF switches and multiplexers; analog microcontrollers; clock and timing products.
Analog Devices’ expected earnings growth rate for the current year is 59.3%. The Zacks Consensus Estimate for current-year earnings has improved 11.6% over the past 60 days. ADI currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Microchip Technology
Microchip Technology has been consistently benefiting from its strength in the analog and microcontroller businesses. MCHP’s dominance in 8, 16, and 32-bit PIC microcontrollers remains a major driver of top-line and bookings growth. Microchip Technology has acquired notable companies like Tekron International, Microsemi and Atmel to add strength to its product offerings.
Microchip Technology’s expected earnings growth rate for the current year is 88.4%. The Zacks Consensus Estimate for current-year earnings has improved 20.2% over the past 60 days. MCHP currently has a Zacks Rank #1.
Texas Instruments
Texas Instruments is an original equipment manufacturer of analog, mixed-signal and digital signal-processing integrated circuits. TXN has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia and Europe. Management strategy has been to build assets that would be fully utilized through their lifetimes and outsource any excess demand in peak situations to outside foundries.
Texas Instruments’ expected earnings growth rate for the current year is 40.6%. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the past 60 days. Currently, TXN carries a Zacks Rank #2.
Taiwan Semiconductor Manufacturing Company Limited
Taiwan Semiconductor Manufacturing Company Limited is the world's largest dedicated integrated circuit (“IC”) foundry. TSM manufactures ICs for its customers based on its proprietary designs using its advanced production processes. Taiwan Semiconductor Manufacturing Company Limited’s goal is to establish itself as one of the world's leading semiconductor companies by building upon the strengths that have made it the world's leading IC foundry.
Taiwan Semiconductor Manufacturing Company Limited’s expected earnings growth rate for the current year is 44.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days. TSM presently carries a Zacks Rank #2.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>This article originally published on Zacks Investment Research (zacks.com).
