Applied Materials (NASDAQ:AMAT), Arm Holdings (NASDAQ:ARM), and Nvidia (NASDAQ:NVDA) are among the top semiconductor stocks to own in 2025, according to KeyBanc Capital Markets, which based its outlook on a survey of portfolio managers.

Analysts at the firm expect semiconductor revenue (excluding memory) to rise 9% in 2025, driven by recovering demand in the first half of the year and a stronger-than-usual rebound in the second half. They see generative AI as a major growth driver, particularly in data centers, with modest demand increases in PCs, smartphones, and servers.

KeyBanc forecasts wafer fab equipment spending to hit $100 billion, led by advanced logic, memory, and packaging technologies. Improving inventory trends are also expected to help the semiconductor sector's fundamental recovery.

Besides AMAT, ARM, and NVDA, the firm highlighted Lam Research (NASDAQ:LRCX), On Semiconductor (NASDAQ:ON), and MKS Instruments (NASDAQ:MKSI) as top picks, assigning an Overweight rating to all six stocks.