5 Super Semiconductor Stocks to Buy Hand Over Fist Heading Into 2025

The world's biggest technology companies are spending an enormous amount of money building data centers, and they are filling them with graphics processing chips (GPUs) designed for artificial intelligence (AI) development.

GPUs are built for parallel processing, meaning they can handle large volumes of data and multiple workloads at once, which is key to training AI models and performing AI inference. Based on recent financial reports:

• Microsoft spent $55.7 billion on capital expenditures (capex) during its fiscal 2024 year (ended June 30), most of which went toward AI data center infrastructure and chips.

• Amazon spent $30.5 billion on capex during the first half of 2024, mostly related to AI.

• Alphabet spent $25 billion on AI capex in the first half of 2024.

• Meta Platforms plans to spend between $37 billion and $40 billion on AI capex for the whole of 2024.

• Oracle spent $6.9 billion on AI capex in its fiscal 2024 year (ended May 31).

Microsoft, Amazon, Meta, and Oracle have explicitly said they plan to spend even more money in the coming year. That spells opportunity for the semiconductor industry, so here are five top chip stocks to buy heading into 2025.

1. Nvidia

When it comes to data center GPUs, Nvidia (NASDAQ: NVDA) is the undisputed leader. Its H100 GPU set the benchmark for the AI industry last year, and the company is now gearing up to ship an entirely new generation of chips based on its Blackwell architecture.

Blackwell-based systems like the GB200 NVL72 will perform AI inference at up to 30 times the speed of equivalent H100 systems. Plus, individual GB200 GPUs are expected to sell for between $30,000 and $40,000 each, which is in line with what data center operators originally paid for the H100. In other words, Blackwell paves the way for a substantial improvement in cost efficiency for developers, who normally pay for computing capacity by the minute.

Nvidia CEO Jensen Huang expects Blackwell GPUs to start contributing billions of dollars to the company's revenue in the final quarter of fiscal 2025 (which runs from November to January), and shipments will scale up from there.

Nvidia is on track to generate an estimated $125.5 billion in total revenue in fiscal 2025, representing a 125% increase from the prior year. Its stock isn't cheap, but it does trade at a reasonable forward price to earnings (P/E) ratio of 29.1 when measured against the company's forecast fiscal 2026 earnings per share.

Simply put, investors who are willing to hold Nvidia stock for at least the next 18 months are likely paying a reasonable price today.