Best large-cap semiconductor stocks to invest in 2025

Large-cap semiconductor stocks are foundational to modern technology, powering everything from data centers and AI applications to smartphones and electric vehicles. These companies operate at the cutting edge of innovation, delivering essential components and design tools that enable the digital economy to scale. With robust financials, wide moats, and global influence, they remain key drivers of long-term portfolio growth.

KLA Corporation specializes in process control and yield management systems, critical to semiconductor fabrication. Monolithic Power Systems stands out for its efficient power solutions tailored for high-performance computing and industrial applications. Cadence Design Systems provides electronic design automation tools that underpin chip design innovation worldwide.

As semiconductor demand continues rising across industries, these names rank among the best large-cap semiconductor stocks to invest in 2025 – offering strong growth potential and technological leadership.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in top 10 stocks mentioned in this article 5 years ago.

Now, let`s take a closer look at each of the companies:

  • KLA (NYSE:KLAC)

    KLA Corporation is a global leader in process control and yield management solutions for the semiconductor and electronics industries, headquartered in Milpitas, California. Founded in 1976, the company has played a pivotal role in advancing the manufacturing of integrated circuits and other microelectronics. With operations spanning more than 20 countries, KLA supports the world's leading chipmakers with innovative technologies and services.

    The company specializes in developing advanced inspection, metrology, and data analytics systems that ensure the quality and efficiency of semiconductor manufacturing processes. KLA's solutions enable precise defect detection, process control, and optimization, helping customers achieve higher yields and improved device performance. Dedicated to technological innovation and sustainability, KLA continues to drive progress in the semiconductor industry, empowering its clients to meet the demands of an increasingly connected world.

    KLA financial statements

    Analysts recommendation: 2

    Financial Health

    • Return on assets (ROA): 19.9%
    • Return on equity (ROE): 100.77%
    • Return on investment (ROI): 36.77%

    Profitability

    • Gross margin: 60.91%
    • Operating margin: 42.58%
    • Net profit margin: 33.41%

    Growth

    • EPS (past 5 years): 22.04%
    • EPS (current): 30.34
    • EPS estimate (next quarter): 8.53
    • EPS growth (this year): 46.7%
    • EPS growth (next year): 2.6%
    • EPS growth (next 5 years): 16.59%
    • EPS growth (quarter-over-quarter): 84.4%
    • Sales growth (past 5 years): 16.5%
    • Sales growth (quarter-over-quarter): 23.6%

    💡 Why invest in KLA?

    Like a precision engineer crafting the microscopic foundations of modern technology, KLA demonstrates compelling competitive advantages in semiconductor manufacturing:

    • Process Control Leadership: KLA maintains unrivaled expertise in semiconductor process control and yield management, ensuring flawless chip manufacturing through advanced inspection and metrology solutions that drive consistent revenue.
    • Technology Diversification: The company strategically expands beyond traditional inspection into AI-powered systems and advanced materials analysis, creating multiple growth avenues while reducing dependence on single market segments.
    • Innovation Investment: Heavy R&D spending on atomic-level defect detection and data-driven process optimization ensures KLA's solutions remain cutting-edge and essential for next-generation semiconductor manufacturing requirements.
    • Global Market Access: Operations spanning multiple continents provide access to diverse technology markets and emerging economies with growing semiconductor demand, supporting international expansion and revenue diversification.

    🐌 Key considerations before investing in KLA

    While KLA navigates the silicon maze with its micro-manufacturing expertise and innovative solutions, there are some potential roadblocks to consider before joining this high-stakes journey:

    • Valuation Premium: KLA's stock trades at elevated valuations that reflect high growth expectations, creating potential downside risk if the company fails to meet ambitious performance targets or market conditions deteriorate.
    • Market Cyclicality: Global economic downturns significantly impact semiconductor capital equipment demand as chipmakers reduce spending, directly affecting KLA's revenue and profitability during cyclical market contractions.
    • Technology Disruption: Rapid advances in chip manufacturing processes and emerging technologies could potentially obsolete KLA's current inspection methods, requiring continuous innovation investment to maintain market relevance.
    • Trade Restrictions: International trade tensions and export restrictions on semiconductor equipment can disrupt KLA's global operations, limit market access, and impact supply chain efficiency in key geographic regions.

    Final thoughts on KLA

    KLA's process control leadership, technology diversification, innovation investment, and global market access create compelling opportunities for investors seeking exposure to the essential semiconductor equipment sector. However, valuation premiums, economic sensitivity, technology disruption risks, and geopolitical tensions present significant challenges that require careful evaluation of market cycles and competitive dynamics. Like a master craftsman perfecting the invisible architecture of digital innovation, KLA continues building the precision tools that enable the semiconductor revolution driving modern technological advancement.

  • Monolithic Power Systems (NYSE:MPWR)

    Monolithic Power Systems, Inc. (MPS) is a leading semiconductor company specializing in high-performance, integrated power solutions for a wide range of applications. Founded in 1997 and headquartered in Kirkland, Washington, MPS focuses on delivering efficient, compact, and reliable power management solutions. Its products serve industries such as automotive, industrial, cloud computing, telecommunications, and consumer electronics.

    MPS is known for its innovative power semiconductor technologies, including highly integrated power modules and high-efficiency voltage regulators. The company's solutions help reduce energy consumption while enhancing performance in electronic devices, data centers, and electric vehicles. With a strong emphasis on research and development, Monolithic Power Systems continues to drive advancements in power electronics, making modern technology more efficient and sustainable.

    Monolithic Power Systems financial statements

    Analysts recommendation: 1.74

    Financial Health

    • Return on assets (ROA): 12.48%
    • Return on equity (ROE): 66.5%
    • Return on investment (ROI): 55.7%

    Profitability

    • Gross margin: 55.31%
    • Operating margin: 24.79%
    • Net profit margin: 73.17%

    Growth

    • EPS (past 5 years): 72.75%
    • EPS (current): 38.21
    • EPS estimate (next quarter): 4.11
    • EPS growth (this year): 35.6%
    • EPS growth (next year): 17.14%
    • EPS growth (next 5 years): 17.59%
    • EPS growth (quarter-over-quarter): 47.35%
    • Sales growth (past 5 years): 28.58%
    • Sales growth (quarter-over-quarter): 31%

    💡 Why invest in Monolithic Power Systems?

    Why Consider Monolithic Power Systems for Your Portfolio?:

    • Strong Growth Potential: The increasing demand for smaller, more powerful electronics creates a favorable environment for MPWR's products, driving consistent revenue growth through expanding market opportunities.
    • Essential for Electronics: Power management ICs are fundamental components in most electronic devices, making MPWR's products crucial for the continued miniaturization and efficiency of modern electronics across multiple industries.
    • Diversified Revenue Streams: MPWR caters to a wide range of electronic applications, reducing their dependence on any single market segment while providing stability through diversified market exposure and customer base expansion.
    • Focus on Innovation: MPWR actively invests in research and development to stay ahead of the curve in power management technology, consistently delivering cutting-edge solutions that meet evolving market demands.
    • Strong Financial Performance: MPWR boasts a history of consistent revenue and profit growth, demonstrating exceptional operational efficiency and market execution while maintaining healthy margins and strong cash generation capabilities.

    🐌 Key considerations before investing in Monolithic Power Systems

    Challenges to Consider:

    • Market Rivalry: The semiconductor industry is fiercely competitive, with established players and nimble startups vying for market share, requiring continuous innovation to maintain competitive advantages and market position.
    • Demand Fluctuations: The demand for electronic devices and MPWR's ICs can be cyclical and influenced by economic conditions, creating potential revenue volatility and earnings unpredictability during market downturns.
    • Reliance on Manufacturing: MPWR relies on outsourced manufacturing facilities, which can introduce potential supply chain disruptions, production delays, and cost fluctuations that may impact profitability and delivery schedules.
    • Trade Tensions: Trade tensions and global instability can impact MPWR's ability to source materials and manufacture products, creating operational challenges and potential cost increases that affect margins.

    Final thoughts on Monolithic Power Systems

    Monolithic Power Systems' strong track record, focus on innovation, diversified product portfolio, and essential role in the electronics industry paint a promising picture for long-term investors seeking exposure to the technology sector. However, the competitive landscape, cyclical demand, reliance on manufacturing, and geopolitical risks necessitate careful consideration and thorough research. Like a master electrician powering the digital revolution, MPWR offers investors exposure to the essential infrastructure of modern electronics, but success requires understanding industry cycles and competitive dynamics.

  • Cadence Design Systems (NYSE:CDNS)

    Cadence Design Systems, Inc. is a leading electronic design automation (EDA) company specializing in software, hardware, and intellectual property (IP) solutions for semiconductor and system design. Founded in 1988 and headquartered in San Jose, California, the company provides cutting-edge tools that enable the development of advanced chips, systems-on-chip (SoCs), and electronic devices. Cadence serves a diverse range of industries, including consumer electronics, automotive, aerospace, and artificial intelligence, helping engineers design high-performance and energy-efficient products.

    With a strong emphasis on computational software and AI-driven automation, Cadence offers solutions that streamline chip design, verification, and system optimization processes. Its portfolio includes industry-leading digital and analog design tools, high-speed verification platforms, and custom IP solutions that accelerate innovation. By continuously advancing its technologies and collaborating with semiconductor leaders, Cadence Design Systems remains at the forefront of electronic design, enabling the creation of next-generation computing and connectivity solutions.

    Cadence Design Systems financial statements

    Analysts recommendation: 1.67

    Financial Health

    • Return on assets (ROA): 11.73%
    • Return on equity (ROE): 21.84%
    • Return on investment (ROI): 14.91%

    Profitability

    • Gross margin: 85.57%
    • Operating margin: 29.35%
    • Net profit margin: 19.88%

    Growth

    • EPS (past 5 years): 1.8%
    • EPS (current): 3.69
    • EPS estimate (next quarter): 1.58
    • EPS growth (this year): -29.8%
    • EPS growth (next year): 14.74%
    • EPS growth (next 5 years): 14.23%
    • EPS growth (quarter-over-quarter): 10.44%
    • Sales growth (past 5 years): 14.72%
    • Sales growth (quarter-over-quarter): 20.2%

    💡 Why invest in Cadence Design Systems?

    Cadence's robust profile makes it a tempting pick for investors seeking exposure to the ever-evolving semiconductor and software sectors. Here's what fuels its formidable technological toolbox:

    • Chip Whisperer: Cadence boasts a legendary pedigree in EDA, providing tools and services for designing, verifying, and manufacturing cutting-edge chips. This leadership in silicon orchestration translates to consistent contracts and predictable revenue streams, laying a solid foundation for future growth.
    • Beyond the Nanometer: Recognizing the blurring lines between chip and software, Cadence diversifies its offerings, developing solutions for secure software quality and testing, artificial intelligence chip design, and cloud-based design tools. This strategic expansion mitigates risk and unlocks diverse avenues for growth beyond traditional EDA.
    • Innovation Alchemist: From futuristic 3D chip architecture to AI-powered design automation, Cadence invests heavily in R&D, striving to stay ahead of the curve with solutions that redefine chip design and software integration. This commitment to innovation ensures its offerings remain relevant and future-proofs its operations.
    • Global Chipmaker's Chorus: With operations spanning continents, Cadence caters to diverse design needs and unlocks international growth potential. This global reach provides access to emerging markets with burgeoning chip demands, further bolstering its future prospects.

    🐌 Key considerations before investing in Cadence Design Systems

    While Cadence navigates the silicon maze with its design expertise and technological prowess, there are some potential roadblocks to consider before joining this high-stakes journey:

    • Valuation Concerns: Like many established tech companies, CDNS's stock can be volatile, and the current price might reflect expectations of future technological breakthroughs and market trends. A cautious approach with a patient, long-term perspective is wise.
    • Economic Jitters: Global economic downturns can impact consumer demand for electronic devices, potentially hitting chipmakers and indirectly impacting Cadence's business. Close monitoring of economic trends and their impact on the tech sector is crucial.
    • Technological Leapfrogs: Advances in chip design and manufacturing processes could disrupt traditional methods and challenge Cadence's focus on existing EDA tools. Stay informed about industry trends and how Cadence plans to adapt and innovate.
    • Geopolitical Tensions: Trade wars and international conflicts can disrupt supply chains and impact access to critical materials, potentially impeding Cadence's operations and profitability. Monitor geopolitical developments and their potential impact on the semiconductor sector.

    Final thoughts on Cadence Design Systems

    Cadence's design leadership, diversifying offerings, commitment to innovation, and global reach paint a potentially promising picture for long-term investors seeking exposure to the dynamic semiconductor and software sectors. However, the volatile nature of the stock, economic sensitivity, potential technological disruption, and geopolitical tensions warrant a measured approach. Thorough research, analysis of Cadence's future plans and the tech landscape, and a clear understanding of your risk tolerance are crucial before joining this tech expedition. Remember, navigating the intricate terrain of tech stocks requires both a discerning eye for cutting-edge solutions and a balanced perspective on potential challenges. Choose wisely, and your portfolio might just find itself conducting a harmonious melody alongside the technological success story of Cadence Design Systems.

  • Applied Materials (NYSE:AMAT)

    Applied Materials, Inc. is a global leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Founded in 1967 and headquartered in Santa Clara, California, the company plays a critical role in the semiconductor industry by providing manufacturing equipment, software, and services. Its innovations enable chipmakers to advance Moore's Law, develop cutting-edge semiconductor devices, and enhance the efficiency of electronic products.

    With expertise in deposition, etching, metrology, and process control, Applied Materials serves leading semiconductor foundries, memory manufacturers, and display panel producers. The company's technologies are essential for fabricating smaller, faster, and more power-efficient chips, driving advancements in artificial intelligence, 5G, and cloud computing. By investing heavily in research and development, Applied Materials continues to push the boundaries of semiconductor manufacturing, ensuring its leadership in an industry crucial to modern technology.

    Applied Materials financial statements

    Analysts recommendation: 1.72

    Financial Health

    • Return on assets (ROA): 15.88%
    • Return on equity (ROE): 35.63%
    • Return on investment (ROI): 27.3%

    Profitability

    • Gross margin: 48.5%
    • Operating margin: 30.58%
    • Net profit margin: 23.88%

    Growth

    • EPS (past 5 years): 24.62%
    • EPS (current): 8.37
    • EPS estimate (next quarter): 2.35
    • EPS growth (this year): 8.3%
    • EPS growth (next year): 6.12%
    • EPS growth (next 5 years): 8.62%
    • EPS growth (quarter-over-quarter): 27.77%
    • Sales growth (past 5 years): 13.22%
    • Sales growth (quarter-over-quarter): 7.7%

    💡 Why invest in Applied Materials?

    Applied Materials' unique position in the semiconductor supply chain offers several potential advantages for investors seeking exposure to this critical sector:

    • Technology Leadership: Modern electronics rely on ever-smaller, more powerful chips. Applied Materials' technology is crucial for producing these chips, making them a vital player in technological progress.
    • Strong Industry Growth: The demand for semiconductors is expected to continue growing due to the increasing adoption of technology across various sectors, creating sustained opportunities for Applied Materials' equipment solutions.
    • Diversified Product Portfolio: They cater to a wide range of chip types, from logic chips for computers to memory chips for smartphones, reducing their dependence on any single market segment and providing revenue stability.
    • International Reach: Applied Materials operates worldwide, ensuring a steady stream of revenue and positioning them to benefit from growth in emerging markets while diversifying geographic risk exposure.

    🐌 Key considerations before investing in Applied Materials

    However, before investing in Applied Materials, it's crucial to consider the potential challenges they face:

    • Industry Cyclicality: The demand for chips can be cyclical, impacted by economic downturns and fluctuations in consumer spending, creating revenue volatility and unpredictable earnings patterns for Applied Materials.
    • Equipment Competition: The semiconductor equipment market is fiercely competitive, with established players and ambitious startups vying for market share. Maintaining their technological edge will be critical.
    • Supply Disruptions: Geopolitical tensions can disrupt supply chains and impact the availability of raw materials essential for chip production, creating operational challenges and potential revenue disruptions.
    • Rapid Technological Advancements: The semiconductor industry is constantly evolving, requiring Applied Materials to continuously innovate and invest heavily in R&D to maintain competitive advantages and market leadership.

    Final thoughts on Applied Materials

    Applied Materials' strong position in the semiconductor supply chain, their diversified product portfolio, and global reach paint a promising picture for long-term investors seeking exposure to the ever-growing semiconductor industry. However, the cyclical nature of the industry, competition, geopolitical tensions, and the need for continuous innovation necessitate careful consideration and thorough research. Like a master craftsman forging the tools that build tomorrow's technology, Applied Materials offers investors a foundational role in the digital revolution, but success requires understanding industry cycles and innovation demands.

  • Qualcomm (NYSE:QCOM)

    Qualcomm Incorporated is a leading global semiconductor and telecommunications equipment company headquartered in San Diego, California. Founded in 1985 by Irwin Jacobs and Andrew Viterbi, Qualcomm has played a pivotal role in the development of wireless communication technologies, particularly in mobile networks. The company's innovations in mobile processing, 5G connectivity, and semiconductor design have made it one of the most influential players in the tech industry.

    Qualcomm specializes in the design and manufacturing of semiconductors, including mobile processors, modems, and system-on-chip (SoC) solutions. Its technologies power a wide range of devices, from smartphones to automotive systems, and its leadership in 5G technology is shaping the future of wireless communication. With a commitment to advancing mobile and IoT ecosystems, Qualcomm continues to drive innovation in connectivity and enable the next generation of digital experiences.

    Qualcomm financial statements

    Analysts recommendation: 2.21

    Financial Health

    • Return on assets (ROA): 14.17%
    • Return on equity (ROE): 44.62%
    • Return on investment (ROI): 26.94%

    Profitability

    • Gross margin: 55.68%
    • Operating margin: 26.65%
    • Net profit margin: 26.77%

    Growth

    • EPS (past 5 years): 20.08%
    • EPS (current): 10.36
    • EPS estimate (next quarter): 2.71
    • EPS growth (this year): 29.4%
    • EPS growth (next year): 1.72%
    • EPS growth (next 5 years): 6.55%
    • EPS growth (quarter-over-quarter): 22.52%
    • Sales growth (past 5 years): 9.93%
    • Sales growth (quarter-over-quarter): 10.3%

    💡 Why invest in Qualcomm?

    Mobile dominance, 5G symphony conductor, innovation ecosystem weaver, and global footprint expansionist make QCOM a potentially rewarding tech investment:

    • Mobile Dominance: Qualcomm chips rule the roost in smartphones, boasting partnerships with leading phone manufacturers and controlling a sizeable share of the mobile processor market, ensuring robust and predictable revenue streams.
    • 5G Symphony Conductor: As the 5G revolution unfolds, Qualcomm stands at the helm, supplying cutting-edge modems and network infrastructure solutions, unlocking vast growth potential in a rapidly expanding landscape.
    • Innovation Ecosystem Weaver: Beyond chips, Qualcomm invests heavily in R&D, developing next-generation technologies like artificial intelligence and autonomous driving, solidifying its position at the forefront of digital advancements.
    • Global Footprint Expansionist: With operations spanning continents, Qualcomm taps into diverse technological needs and unlocks international growth potential, particularly in emerging markets eager to adopt 5G technology.

    🐌 Key considerations before investing in Qualcomm

    Valuation concerns, semiconductor volatility, competition heats up, and geopolitical tensions present potential roadblocks for QCOM investors:

    • Valuation Concerns: Like many established tech players, QCOM's stock currently sits near all-time highs, demanding a cautious approach due to potentially limited immediate gains. A patient, long-term perspective might be prudent.
    • Semiconductor Volatility: The chipmaking industry is notoriously cyclical and susceptible to supply chain disruptions and economic downturns, adding a layer of uncertainty to Qualcomm's performance and revenue predictability.
    • Competition Heats Up: Ambitious rivals like MediaTek and Huawei are nipping at Qualcomm's heels, requiring constant innovation and strategic maneuvers to maintain market share and competitive advantages.
    • Geopolitical Tensions: Trade disruptions and international politics can impact Qualcomm's supply chains and operations, demanding careful monitoring of global developments and potential regulatory changes.

    Final thoughts on Qualcomm

    Qualcomm's mobile dominance, 5G leadership, unwavering innovation, and global reach paint a potentially rewarding picture for long-term investors seeking exposure to the cutting edge of the tech sector. However, near-peak valuation, semiconductor volatility, rising competition, and geopolitical uncertainties warrant a measured approach and thorough research. Like a master conductor orchestrating the symphony of wireless connectivity, Qualcomm offers investors a chance to participate in the 5G revolution, but success requires understanding industry cycles and competitive dynamics.

If you are interested in other stock categories, check out my other lists of the best large-cap basic materials, utility, tech, semiconductor, retail, industrial, healthcare, financial, energy stocks.