Identifying stocks that may experience massive growth is an art and a science in investing. Under current economic shifts and technological advancements, three companies emerge as prime candidates to capitalize on demand trends in the digital era. These companies represent a trifecta of potential, each exerting formidable strengths in the semiconductor industry set for a massive bull run. The first company is led by its groundbreaking mobile platforms, which are pivotal in the global smartphone ecosystem and are expanding into automotive applications.
Similarly, the second company excels in data center solutions, harnessing AI and advanced interconnect technologies to meet the rising demands of cloud computing. Meanwhile, the three companies stand out with their foundational semiconductor intellectual property (IP), driving innovation across diverse sectors from smartphones to Internet of Things (IoT) devices. In short, these companies are market leaders with strategic investments that involve delving into their core competencies and growth strategies.
Understanding what sets these companies apart, drives their revenue streams, and how these stocks could outperform the market is critical to seizing the opportunities in the semiconductor sector.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) designs and markets wireless telecommunications products and services. In fiscal Q2, Qualcomm derived revenues of $9.4 billion, exceeding expectations. This points to its high demand across its business segments. Chipset Business generated revenues of $8 billion, driven by strong demand for Android smartphones and automotive applications. Licensing businesses contributed $1.3 billion in revenues, showcasing consistent performance in intellectual property licensing. Qualcomm’s Snapdragon mobile platforms are pivotal in setting industry benchmarks. This is especially true for premium and high-tier smartphones.
Moreover, flagship Android devices powered by Snapdragon 8 Gen 3 are experiencing significant global demand, particularly in China, contributing to revenue growth. The Snapdragon 8 Gen 3 platform’s progress points to Qualcomm’s tech lead and demand for high-performance mobile solutions. Further, the Snapdragon 8S Gen 3 and Snapdragon 7 Plus Gen 3 platforms, released in late 2024, target broader smartphone segments. It is expanding Qualcomm’s market reach. Hence, the Snapdragon AI Hub facilitates Qualcomm’s advancements in on-device AI capabilities, improving inferencing speeds four times compared to non-optimized models.
Overall, Qualcomm’s leadership in mobile chipsets and solid revenue from smartphones and the automotive sector make it a top pick on the list of the best stocks to buy for a bull run.
Marvell Technology (MRVL)
Marvell Technology (NASDAQ:MRVL) offers semiconductors targeting data center technologies, networking, and storage. In Q1 fiscal 2025, the company attained a top-line of $816 million from the data center segment, marking 87% annual growth (+7% sequentially). The company may hit mid-single-digit sequential growth in data center revenue for Q2 2025., based on the ramp-up of custom AI silicon. Certainly, Marvell’s solid top-line growth in the data center segment is fueled by strong demand for its electro-optics portfolio. The company’s strategic focus on high-speed interconnect solutions for AI deployments points to its tech lead and aligns well with market trends.
Further, Marvell anticipates substantial custom AI compute revenue growth, aiming for a significant ramp-up in H2 fiscal 2025 and high-volume production in fiscal 2026. The custom accelerated compute market may grow over $40 billion by 2028 ($7 billion in 2023), representing a robust 45% compound annual growth rate (CAGR). Indeed, Marvell’s strategic investments in custom AI computing, facilitated by acquisitions like Cavium and Avera, may derive solid growth.
Overall, Marvell’s advanced products solidify its presence among the top stocks to buy for a bull run, given the growing demands of cloud computing and AI applications.
Arm Holdings (ARM)
Arm Holdings (NASDAQ:ARM) develops semiconductor intellectual property and licenses it to semiconductor manufacturers. The company’s top line for Q4 grew by 47% annually to $928 million. This growth trajectory continued throughout the fiscal year. Royalties, a significant revenue stream for Arm, increased by 37% annually in Q4. The adoption of the Armv9 architecture drove this growth. It commands higher royalty rates and benefits from increased CPU penetration within chips across various markets, notably smartphones and infrastructure. Licensing revenue surged by 60% annually in Q4, reflecting a robust demand for Arm’s IP.
Further, the transition from Armv8 to Armv9 architecture has been pivotal. Armv9-based chips contributed approximately 20% of royalty revenues, up from around 15% in previous quarters. This adoption enhances performance and aligns with increasing demands for energy-efficient computing across various applications, including data centers and edge devices. Arm’s strategy to diversify into new markets (automotive and IoT) has yielded significant results. For instance, introducing the Neoverse V3AE processors for automotive applications reflects Arm’s focus on high-performance and energy-efficient chips.
Overall, Arm Holdings’ IPs, Armv9-based chips, and energy-efficient architecture solidify its lead on the list of the top stocks to buy for a bull run.
On the date of publication, Yiannis Zourmpanos did not hold (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.