Since the AI frenzy began in late 2022, chip stocks have become a hot commodity on the financial markets.
Not all chips are created equal.
Despite all the hype, some of them haven’t done that well in the last few months.
But that doesn’t make them unworthy of owning in 2025.
Jim Cramer, the famous investor, has recently appeared on CNBC.
He recommends that you buy the two best-performing chip stocks on the current weakness.
ASML Holding NV – ASML
ASML stock has fallen nearly 30% in the last six months, but Jim Cramer believes the story will be different going forward.
This Dutch company has struggled in recent months due to US restrictions on the exportation of sophisticated chips to China.
The Mad Money host is still positive about ASML, as it’s the largest supplier to the semiconductor industry in the world and the only provider of extreme ultraviolet lithography (EUV) machines used for manufacturing advanced chip.
This week, he told his audience: “I think ASML’s a remarkably good company, and I believe you should buy it.”
Plus, President Trump recently revealed a desire “to get along with China”.
Who’s to say that under his leadership, the chip export regulations will not be relaxed against Beijing?
He did, in fact, reverse plans to increase tariffs on Chinese products by 60%.
The new US government will likely announce a 10% increase in tariffs for China, which is in line with his plans for other countries.
Lam Research Corp. (NASDAQ: LRCX).
Cramer believes Lam Research will also recover this year after a near 30% drop since July 2024.
“That stock is so low; I want it.” “We have so many semis at the Charitable Trust, but that stock is one of the cheapest I’ve ever seen,” he said on Mad Money this week.
Lam Research will report its second quarter financial results on January 20, .
On $4.31 billion of revenue (up 14.6% on an annual basis), the consensus is that it will earn 87 cents per share (up 16%).
The Nasdaq listed firm will benefit from increased spending in dynamic random access memory, as well as a continued focus on AI applications. LRCX is more attractive in 2025 due to its 1.15% dividend yield.
Plus, Lam Research’s stock is trading at an enormous discount compared to the industry average of 35 times.
Wall Street currently sees a semiconductor company’s stock rising to an average of $92, indicating a potential gain of more than 15% from current levels.
This post Top 2 underperforming Semiconductor stocks Jim Cramer recommends buying in 2025 can be modified as new information unfolds
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