We recently published a list of the 11 Best Semiconductor Equipment Stocks to Buy According to Analysts. In this article, we are going to take a look at where ACM Research, Inc. (NASDAQ:ACMR) stands against other best semiconductor equipment stocks to buy according to analysts.

As per Straits Research, the US semiconductor manufacturing equipment market size was pegged at US$13.2 billion in 2024. It is expected to grow from US$13.5 billion in 2025 to US$16.5 billion by 2033. This growth is expected to stem from increasing investments in domestic semiconductor manufacturing and the higher demand for advanced semiconductors in critical sectors, including artificial intelligence (AI), 5G, and EVs.

Market Drivers for Semiconductor Manufacturing Equipment

Straits Research highlighted that the resurgence of semiconductor manufacturing in the US is aided by the government initiatives. The federal push is targeted at reducing the dependency on Asian imports as well as strengthening the domestic supply chains. Leading companies continue to establish new fabs in the US, which helps create demand for advanced wafer manufacturing and fabrication equipment. Overall, the increased requirement for high-performance chips in sectors including defense, telecommunications, and automotive further cements the growth of semiconductor equipment.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Growth Opportunities for Semiconductor Equipment

The rapid adoption of AI and 5G technologies in the United States continues to present strong opportunities for the broader semiconductor manufacturing equipment market, highlighted Straits Research. AI chips, primarily the ones utilized in data centers and autonomous vehicles, need advanced manufacturing techniques, fueling demand for cutting-edge equipment. Furthermore, the launch of 5G networks has been driving rapid production of semiconductors, which are capable of handling higher data transmission rates, further enhancing the need for advanced fabrication technology. The US is well-placed as a leader in AI and 5G development, with leading companies driving innovation, demonstrating strong growth potential.

KPMG believes that Al is now the most important application fueling semiconductor companies’ revenue as businesses continue to incorporate the technology in their digital transformations. As a result, the spending on Al semiconductors is projected to be $174 billion in 2025, which is expected to increase to $280 billion in 2028. KPMG also highlighted that semiconductor leaders opine that Al enablers (which include high-bandwidth memory) are the production technology that can have an impact on the broader industry over the upcoming 3 years. In an era in which Al applications are present in all the industries – ranging from autonomous vehicles to healthcare diagnostics, household devices to personalized recommendations—there remains a higher demand for semiconductors aiding Al capabilities.

Our Methodology

To list the 11 Best Semiconductor Equipment Stocks to Buy According to Analysts, we used a screener to shortlist the companies catering to the broader semiconductor equipment market. Next, we filtered out the stocks that analysts see significant upside to. The stocks are arranged in ascending order of their average upside potential, as of April 9. We also mentioned the hedge fund sentiments around each stock, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Close-up of a worker wearing protective gear inspecting a silicon wafer in a laboratory.

ACM Research, Inc. (NASDAQ:ACMR)

Average Upside Potential: ~91.8%

Number of Hedge Fund Holders: 23

ACM Research, Inc. (NASDAQ:ACMR) is engaged in developing, manufacturing, and selling semiconductor process equipment. JPMorgan analyst Jimmy Huang initiated coverage of the company’s stock with an “Overweight” rating and a price objective of $36. As per the firm, the company’s breakthrough in sulfuric peroxide mix cleaning is expected to fuel significant revenue upside and ease the market concerns of competition from Chinese peers. Notably, ACM Research, Inc. (NASDAQ:ACMR) announced that its Single-Wafer High-Temperature Sulfuric Peroxide Mixture (SPM) tool has been qualified by a key logic device manufacturer in mainland China. As per the release dated March 3, the company delivered its SPM tools to thirteen customers.

The Single-Wafer Moderate/High-Temperature SPM tool remains a critical example of the company’s commitment to innovation in solving customers’ problems in high-volume 300mm semiconductor manufacturing. The Moderate/High-Temperature SPM exhibits a growing portion of the wafer-cleaning equipment market, mainly the High-Temperature SPM tool, which plays an important role in manufacturing next-gen semiconductor devices. Overall, ACM Research, Inc. (NASDAQ:ACMR) continues to witness robust growth because of increased demand for advanced semiconductor manufacturing equipment, mainly fueled by Al and HPC, which needs complex and precise wafer-cleaning as well as packaging solutions.

Overall, ACMR ranks 2nd on our list of best semiconductor equipment stocks to buy according to analysts. While we acknowledge the potential of ACMR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than ACMR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.