Artificial intelligence is the biggest hype cycle of all-time. And it's just getting started.

The stock market is currently cruising at unprecedented altitudes (S&P 500 is above 5,000 for the first time ever), owing much of its recently bullish sentiment to excitement surrounding the AI space. In particular, that hype has been applied mostly to the corners of the market that will have the most to gain from an artificial intelligence revolution: semiconductor stocks.

They're the picks and shovels in a brave new world where ~data~ is the new most valuable resource -- many have called it the oil of our generation. And while the entire S&P 500 has soared behind AI, semiconductor stocks have soared even further, to their highest relative levels since the last major technological hype cycle back in 2001 (ie. the internet boom).

Just look at this chart:

As the backbone of AI and modern electronics, semiconductors have seen their market values skyrocket, mirroring the explosive growth of AI applications across industries. This article explores the titans of the semiconductor sector, whose innovations power everything from smartphones to autonomous vehicles, highlighting their strategic roles and burgeoning market caps.

To put the ballooning semiconductor valuations into perspective: 20% of the world's top 25 largest companies are in the chip-making business (in terms of market capitalization, ie. total stock value) are now semiconductor hardware companies. It's one of the fastest growing industries on the planet.

Top 15 Largest Semiconductor Companies

To better understand this trending of hyped chipmakers, we dove deep to analyze the top 15 largest semiconductor companies throughout the globe in terms of total market capitalization. From established giants to rising stars, these companies are at the forefront of an industry that is shaping the future of technology.

Here's the full list:

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#1 Nvidia

Stocks Ticker: NVDA

Market Cap: $2.3T 🏆

YTD Return: +91%

Country: United States

Year Founded: 1999

Head and shoulders at the top of the list is Nvidia. Nvidia is the colossus in GPU technology, leading he semiconductor industry with a market cap roughly 3x the size of the next closest in the industry. In fact, Nvidia's stock is so big that it accounts for roughly 32% of the market cap of the entire semiconductor industry.

The company's GPUs are crucial for AI research and development, and its recent forays into autonomous driving and healthcare AI signify a robust growth trajectory and diversification strategy. Here's a compelling infographic showing where and how Nvidia makes a profit

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#2 Taiwan Semiconductor

Stocks Ticker: TSM

Market Cap: $732B

YTD Return: +40%

Country: Taiwan

Year Founded: 1994

As the world's premier semiconductor foundry, TSMC manufactures chips for industry giants like Apple and AMD -- with Apple accounting for roughly one-fifth of TSMC's annual revenue. Its strategic importance to the world economy *literally* cannot be overstated, with innovations that drive the majority of the world's advanced semiconductor production.

TSMC's recently announced a $40B expansion plan to build a second Fab in Phoenix in response to Biden's 2022 CHIPs Act. These expansion plans in the US and continuous technology advancements position it well for future demand; meanwhile its political importance to the countries of Taiwan and China are also a huge deal right now.

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#3 Broadcom

Stocks Ticker: AVGO

Market Cap: $605B

YTD Return: +20%

Country: United States

Year Founded: 2009

Broadcom is a behemoth in the design and development of digital and analog semiconductor connectivity solutions, including Wi-Fi, Bluetooth, and GPS. It essentially lives a few layers up the supply chain from the likes of Nvidia and TSMC.

Recent acquisitions (including the historic $69B acquisition of VMWare in November 2023) have broadened its portfolio, making it a critical player not only in telecommunications but also in software and infrastructure technology sectors. Broadcom is currently ranked the 11th largest company in the world in terms of market cap.

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#4 Samsung

Stocks Ticker: NRW

Market Cap: $732B

YTD Return: +1%

Country: South Korea

Year Founded: 1969

Everyone knows Samsung, in fact it may be the most publicly recognizable name brand on this list (even more so than Nvidia). Samsung is known globally for its consumer electronics from phones to laptops to TVs.

But fewer people know that Samsung also operates one of the largest semiconductor manufacturing divisions on the planet. The company is pivotal in memory chip technology and is expanding its foundry services, aiming to rival TSMC with significant investments in fabrication plants and R&D. If successful, this would be a huge value proposition on top of its already-robust portfolio in the value chain.

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#5 ASML

Stocks Ticker: ASML

Market Cap: $360B

YTD Return: 22%

Country: Netherlands

Year Founded: 1984

ASML stands alone as the sole supplier of advanced photolithography machines used for semiconductor manufacturing, which are essential for producing smaller, more powerful microchips. Its role is vital as the industry pushes the boundaries of Moore's Law, with technology that is fundamental to next-generation chip production.

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#6 Advanced Micro Devices

Stocks Ticker: AMD

‍Market Cap: $250B

YTD Return: 55%

Country: USA

Year Founded: 1969

AMD has emerged as a major competitor to Intel in the CPU market and a leader in graphics processing units, catering to both the gaming and professional markets. Their recent gains in server and data center markets reflect their successful strategy and innovation, particularly in high-performance computing and graphics technologies, positioning them well for future growth.

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#7 Qualcomm Incorporated

Stocks Ticker: QCOM

Market Cap: $202B

YTD Return: 15%

Country: USA

Year Founded: 1985

Qualcomm is a powerhouse in wireless communications technology, especially known for its chipsets that power a majority of the world's smartphones. With the rollout of 5G technology, Qualcomm's advanced chips and intellectual property have become even more critical, setting the stage for new opportunities in mobile, automotive, and IoT applications.

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#8 Applied Materials

Stocks Ticker: AMAT

Market Cap: $172B

YTD Return: 27%

Country: USA

Year Founded: 1967

Applied Materials is a leading equipment supplier in the semiconductor industry, specializing in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Their innovations in semiconductor fabrication are crucial as chips become more integrated and complex, driving demand for more sophisticated manufacturing technology.

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#9 Texas Instruments

Stocks Ticker: TXN

Market Cap: $165B

YTD Return: 8%

Country: USA

Year Founded: 1930

Texas Instruments is renowned for its broad portfolio of semiconductors, particularly in analog chips and embedded processors. With a strong presence in the automotive and industrial sectors, TI's commitment to practical innovation has kept it at the forefront of market demands, especially in areas like energy management and efficient power solutions.

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#10 Intel Corporation

Stocks Ticker: INTC

Market Cap: $133B

YTD Return: -3%

Country: USA

Year Founded: 1968

Intel, once the unchallenged leader in semiconductor manufacturing, continues to play a significant role in the development of processors for computers and servers. Despite recent challenges in manufacturing advancements, Intel's aggressive investment in new technologies and foundry services aims to regain its leading position, underscoring its commitment to innovation and growth in the AI and cloud computing sectors.

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#11 Micron Technologies

Stocks Ticker: MU

Market Cap: $132B

YTD Return: 29%

Country: USA

Year Founded: 1978

Micron is a global leader in memory and storage solutions, crucial for applications in AI, data centers, and mobile devices. Their continuous innovation in DRAM and NAND technologies is essential as the demand for increased data storage and faster processing continues to grow. Micron's strategic focus on memory solutions positions them as a key player in the technological advancements of the future

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#12 Lam Research Corp

Stocks Ticker: LRCX

Market Cap: $121B

YTD Return: 22%

Country: USA

Year Founded: 1980

Lam Research plays a pivotal role in the semiconductor manufacturing process, supplying equipment and services for wafer fabrication. Their cutting-edge technology in etching and deposition is vital for producing smaller, more efficient chips. As semiconductor complexity increases, Lam’s innovative solutions are ever more critical, driving their growth and presence in the industry.'

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#13 Arm Holdings

Stocks Ticker: Private

‍Market Cap: $109B

Country: UK

Year Founded: 1990

Arm Holdings designs microprocessors and licenses technology that powers the majority of mobile devices and increasingly, technologies in the IoT and automotive sectors. Known for energy-efficient processor designs, Arm’s architecture is pivotal in the era of smart, connected devices. The recent increase in edge computing and IoT devices continues to boost Arm’s influence in technology development

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#14 Tokyo Electron

Stocks Ticker: 8035.T

Market Cap: $105B

YTD Return: 18%

Country: Japan

Year Founded: 1963

Tokyo Electron is a key supplier in the semiconductor production equipment market, specializing in etch systems and coater/developers used in the manufacturing of integrated circuits. Their commitment to innovation and quality supports the semiconductor industry’s advancement towards smaller and more complex devices, ensuring their continued growth and relevance in the market.

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#15 Analog Devices

Stocks Ticker: ADI

Market Cap: $100B

‍YTD Return: 11%

Country: USA

Year Founded: 1965

Analog Devices is renowned for its high-performance analog, mixed-signal, and digital signal processing (DSP) integrated circuits (ICs). These components are essential in bridging the physical and digital worlds, critical in everything from automotive systems to medical devices. ADI’s focus on innovative design and precise technology keeps them at the forefront of the semiconductor industry, addressing complex engineering challenges.

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