The semiconductor industry is poised for continued growth, with Bank of America (BofA) forecasting a 15% increase in industry sales to $725 billion in 2025. Although this growth is slower compared to the 20% expected in 2024, it remains robust, driven by advancements in artificial intelligence (AI) and continued innovation in memory and core semiconductors. Here’s an in-depth look at BofA’s insights and their top semiconductor stock picks for the coming years.
Growth Forecast: The Two Sides of 2025
BofA analysts predict that 2025 will follow two distinct trends in semiconductor sales. In the first half of the year, AI investments will continue to fuel demand for semiconductor chips, especially those used in cloud services and AI processing. Notably, BofA sees strong momentum in AI semiconductor demand, especially for companies like NVIDIA (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and Marvell Technology Inc (NASDAQ: MRVL).
In the second half of 2025, however, the focus may shift to more niche sectors such as automotive and industrial chipmakers. This shift will be driven by inventory replenishment and increased auto production, assuming a global economic recovery. BofA highlights ON Semiconductor (NASDAQ: ON) as a top pick in this sector, particularly for its potential cyclical recovery in the second half of 2025, with a focus on electric vehicles (EVs).
Key Semiconductor Stocks for 2025
BofA’s analysis points to several leaders within the semiconductor sector that are well-positioned for growth as AI and other industries drive demand:
NVIDIA (NVDA): Known for its dominance in AI hardware, NVIDIA continues to be a leader in the AI revolution, with its chips powering the vast majority of AI models. BofA sees continued strong growth in this space, especially for cloud providers and AI startups.
Broadcom (AVGO): Broadcom’s portfolio of chips, which support everything from wireless communications to enterprise networking, positions it well to capitalize on growth in both AI and general semiconductor demand.
Marvell Technology Inc (MRVL): Marvell is highlighted for its role in providing storage, processing, and connectivity solutions. With the growing importance of cloud computing and AI, Marvell’s solutions are crucial for data centers and network infrastructure.
Lam Research (LRCX): Specializing in flash memory tools, Lam Research is expected to see strong growth, particularly as capital expenditures in the semiconductor industry recover, especially with the easing of tensions in China.
ON Semiconductor (ON): ON is a key player in the automotive and electric vehicle sector. As the world moves toward EVs and greater energy efficiency, ON’s chips are crucial for the next wave of automotive technology.
Cadence Design Systems Inc (CDNS): Known for its software solutions used in chip design, Cadence is poised for continued growth. As AI hardware demand slows in the latter half of 2025, Cadence’s resilient design tools will continue to be essential for chipmakers.
Integrating Financial Insights: Relevant API Links
For investors interested in understanding the broader context of these stock recommendations, it’s essential to have access to detailed financial data and real-time insights. You can leverage APIs like Company Ratings to analyze the performance of these semiconductor giants and stay updated on their financial health.
Additionally, exploring Market Overview API can help you track trends in the semiconductor industry and spot emerging growth sectors that align with BofA’s forecasts. The Earnings Historical API provides in-depth financial statements, helping investors gauge how these companies have weathered market conditions in previous quarters.
Conclusion
With 2025 projected to be a year of dual trends, the semiconductor industry will remain dynamic. As AI and autonomous driving technologies continue to reshape markets, investing in the right chipmakers like NVIDIA, Broadcom, and Marvell could offer substantial returns. Furthermore, opportunities in automotive and industrial chips, especially with ON Semiconductor, make this sector one to watch closely.
To keep track of the evolving landscape, ensure you are using the right tools, such as detailed financial data and real-time market insights, to make informed decisions.
