Recently, I’ve been paying attention to the semiconductor sector and found that this is indeed a very interesting time.

First, let me explain why we should focus on semiconductors. In recent years, AI has become extremely popular, and since ChatGPT, major tech companies have been competing for computing power, which directly drives the demand for the entire chip industry. Coupled with the development of 5G, new energy vehicles, and Industry 4.0, the application scenarios for semiconductors are increasing. Simply put, without chips, electronic devices have no “brain” and can only perform repetitive tasks. With semiconductors, information can be truly “stored, transmitted, and applied.”

I’ve noticed that the division of labor in the semiconductor industry is becoming more and more detailed. From the earliest vertical integration model, now there are specialized fields such as chip design, wafer manufacturing, equipment, and materials. Each model has its characteristics—design companies are asset-light with low operating costs but higher risks; foundries require large-scale investments but tend to form oligopolies; equipment manufacturers are capital-intensive.

If I had to recommend semiconductor stocks, I think the most worth paying attention to are the three sectors: chip design, wafer manufacturing, and semiconductor equipment. These areas belong to the “long-term growth with thick snow” type, making it easier to seize investment opportunities.

Regarding specific companies, Texas Instruments is almost an absolute leader in analog chips, with a particularly wide moat. NVIDIA has been extremely hot in the past two years, with explosive growth in AI chip demand. TrendForce predicts GPU demand will reach 30k units, giving NVIDIA a huge advantage in this area. Broadcom mainly makes communication chips and continues to expand its market share through acquisitions. Qualcomm, as the largest supplier of 5G baseband chips, holds a 53% market share, with the future target market expanding from the current $100 billion to $700 billion by 2030.

AMD has performed well in recent years, especially in gaming and data centers. ASML controls EUV lithography machines, which only it can produce worldwide, with an unshakable monopoly. Applied Materials and Lam Research are also leading players in semiconductor equipment, benefiting from growing demand in storage, 5G, and AI. Intel remains solid as the leader in PC processors. Micron Technology ranks high in storage chips, with a DRAM market share of 22.52%, ranking third.

Regarding investment timing, I looked at the industry cycle. The semiconductor industry cycle generally lasts 4-5 years, with stock prices usually leading fundamentals by 3-6 months. The last full cycle started in the second half of 2019, peaked in October 2021, then adjusted until bottoming out in 2023. The new upward cycle clearly began in 2024, driven mainly by AI computing power demand. Currently (May 2026), we are in the middle to late stage of the cycle’s upward trend, with a long-term bullish outlook established, but short-term momentum is overheated, and a correction pressure is building.

So, now is not the time to position at the bottom but rather to grasp structural opportunities as the trend confirms. Short-term traders can consider: buying when the stock price breaks above the 5-day moving average with a golden cross of the 5-day over the 10-day, or buying at support levels during dips; selling when RSI shows divergence in overbought zones or during volume expansion with stagnation, to take profits gradually or reduce positions.

Several factors influence semiconductor stock recommendations and prices. Downstream demand changes are critical— in 2023, global 5G terminal shipments reached 1.48 billion units, up 31.7% year-over-year; IoT devices grew 38.5%; automotive electronics increased 35.1%. Inventory levels are also important—high inventory indicates weak demand or oversupply, negatively impacting stock prices; low inventory suggests strong demand or insufficient supply, which is favorable. Technological innovation is also decisive—diversification of AI chips and capacity increases in EUV lithography machines will boost related companies’ stock prices.

Of course, risks must be watched carefully. Macroeconomic instability, interest rate hikes, fierce technological competition, and weak market demand could all affect the performance of semiconductor stocks. Weak consumer electronics demand, uncertain recovery of mobile phones and PCs, and the sustainability of AI computing power growth are ongoing concerns that require continuous monitoring.

In summary, if you are optimistic about the semiconductor sector, you can start to enter gradually, taking advantage of technical pullbacks or RSI oversold signals for low entries. Focus on equipment companies like ASML and Applied Materials, and on chip giants like NVIDIA, AMD, Broadcom, Qualcomm, and Texas Instruments. The core of semiconductor stock recommendations is to choose companies with core competitiveness and leadership in their niche industries; long-term holding can yield good returns.