Semiconductor makers enjoyed strong demand trends earlier in the pandemic due to the spike in sales of laptops and other gadgets amid work-from-home mandates, higher sales of gaming consoles and the rapid digitization of enterprises. However, demand in certain key markets, like personal computers (PCs), has slowed in recent months.

Macro challenges and the growing fears of an impending recession could further hurt demand for chips. Moreover, President Joe Biden’s administration’s new export controls to deny China access to advanced chips could weigh on the sales of major semiconductor makers. Semiconductor companies will have to apply for licenses to export certain high-performance chips, which are usually meant for artificial intelligence (AI) applications, to China.

Setting aside macro pressures and the tension between U.S. and China, the long-term growth potential for semiconductor companies remains attractive, based on the demand in data centers amid continued digitization, automotive, and other AI applications.

Against this backdrop, I used TipRanks’ Stock Comparison Tool to place three leading semiconductor stocks against each other and select the stock that Wall Street finds most promising at current levels.

Advanced Micro Devices (AMD)

Back in October, Advanced Micro Devices (NASDAQ:AMD) warned investors of lower-than-anticipated third-quarter results due to weakness in PC market demand. The update not only spooked AMD investors but also dragged down other chip stocks.

On Nov. 1, AMD reported Q3 revenue of $5.6 billion, which reflected 29% year-over-year (YOY) growth, but slightly lagged expectations. Higher revenue from the data center, embedded and gaming segments more than offset lower client segment revenue due to the softening PC market. Q2 adjusted earnings per share (EPS) declined 8.2% to 67 cents due to the client segment’s operating loss and a higher share count resulting from the Xilinx acquisition.

AMD expects its Q4 revenue to grow by about 14% YOY, fueled by the strength in the embedded and data center segments but partially offset by lower revenue from the client and gaming segments. Additionally, the company’s full-year outlook reflects growth of nearly 43%. Notably, the launch of AMD’s next-generation EPYC server chip (code-named Genoa), on Nov. 10, is expected to further boost its data center revenue.

Raymond James analyst Melissa Fairbanks feels that AMD’s guidance was better than feared, given the notable weakness in the PC market. While Fairbanks acknowledges the weakness in the second half of the year, she is optimistic about the long-term growth story, backed by new launches across each segment, and the company’s collaboration with industry-leading manufacturing partners.

Fairbanks lowered the price target for AMD stock to $80 from $100 on near-term weakness but reaffirmed a “buy” rating.

All in all, Wall Street is cautiously optimistic about AMD, with a “moderate buy” consensus rating based on 17 buys and nine holds. At $85.62, the average AMD price target implies nearly 36% upside potential from current levels.

Nvidia (NVDA)

Nvidia (NASDAQ:NVDA) is widely known for its high-end graphics processing units (GPUs) that are used in gaming, data centers, automotive and other applications. After witnessing impressive growth during the work-from-home days of the pandemic, the company’s gaming revenue plunged in the second quarter of FY23 (ended July 31, 2022).

Additionally, Nvidia cautioned investors about a sequential decline in its gaming revenue in Q3 as buyers are reducing their inventory levels due to the economic slowdown and are postponing their purchases in anticipation of the launch of upgraded products later this year. That said, Nvidia expects sequential growth in its data center and automotive revenues in Q3.

Wells Fargo analyst Aaron Rakers opines that Meta Platforms’ (NASDAQ:META) recently announced capital expenditure guidance for 2023 bodes well for Nvidia and peers Arista Networks (NYSE: ANET), AMD and Pure Storage (NYSE:PSTG).

Rakers noted that Meta’s 2023 capex estimate of $34 billion to $39 billion indicates an increase of 12% at the midpoint. Meta expects its 2023 spending to be directed toward data centers, servers and network infrastructure, with the rise in AI capacity driving almost the entire capex growth next year. The analyst believes that Meta’s focus on AI investments “will likely be taken as an incremental positive data point” for Nvidia.

Overall, Wall Street has a “moderate buy” consensus rating for Nvidia based on 23 buys and nine holds. The average Nvidia price target of $194.83 suggests 32.35% upside potential from current levels.

Intel (INTC)

Over the past few years, chip giant Intel (NASDAQ:INTC) has lost ground to rivals, mainly AMD, due to limited innovation, production delays, and execution issues. The ongoing macro challenges and intense rivalry make Intel’s turnaround difficult.

Intel’s Q3 revenue declined 20% YOY to $15.3 billion, while adjusted EPS fell 59% to 59 cents. Nonetheless, the company managed to beat analysts’ estimates. Like AMD, Intel’s client computing revenue declined YOY due to lower demand in the PC market. However, in contrast to AMD, Intel’s datacenter and AI revenue fell in the third quarter, indicating continued market share loss in this area.

Intel lowered its full-year outlook and expects economic challenges to extend into 2023. The company is focused on transforming its business and aims to deliver cost reductions of $3 billion in 2023. It aims to generate annual savings of $8 billion to $10 billion by the end of 2025 through several measures, including headcount reduction and portfolio cuts.

Truist Securities analyst William Stein noted that Intel’s fourth-quarter guidance significantly missed estimates due to lower demand, excess supply and other reasons.

Intel assured investors that it “continues to make progress with its goal of achieving five nodes in four years.” However, Stein expressed skepticism, stating, “If we could gain confidence in INTC’s ability to execute these plans, we might turn constructive, but that’s tough considering recent history.”

In line with his investment thesis, Stein lowered his price target for Intel stock to $29 from $40. He also reiterated a “hold” rating.

Overall, the Street is sidelined on Intel stock, with a “hold” consensus rating based on four buys, 16 holds and seven sells. The average Intel price target of $29.43 implies 2.65% upside potential.

To conclude, Wall Street is cautiously optimistic about Advanced Micro Devices and Nvidia, but remains on the sidelines when it comes to Intel. Analysts estimate similar upside potential in AMD and Nvidia stocks. While near-term pressures remain, Wall Street is positive about the long-term prospects of AMD and Nvidia, based on their continued innovation and solid execution.

On the date of publication, Sirisha Bhogaraju did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.