Key Points
Global semiconductor revenue is projected to reach $705 billion in 2025, according to Gartner, as demand for artificial intelligence (AI) and high-performance computing (HPC) chips surges across data centers and edge devices. While Nvidia and Broadcom dominate headlines in the AI chips market, there are a few other players better positioned to ride this wave in September.
Here are two AI chip stocks with near-term catalysts and strong long-term potential that investors should keep on their radar.
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Advanced Micro Devices
Advanced Micro Devices (NASDAQ: AMD) is rapidly emerging as a leading player in the AI chip market. The company plans to showcase its progress at two key investor events.
Chief Financial Officer Jean Hu will present at Citi’s Global TMT Conference on Sept. 3, and Data Center head Forrest Norrod will speak at Goldman Sachs’ Communacopia & Technology Conference on Sept. 8. These events could provide more clarity on AMD’s accelerating role in the AI infrastructure market and act as a catalyst for share price gains in September 2025.
AMD’s impressive financial performance in the second quarter supports this expectation. Revenue surged 32% year over year to $7.7 billion, led by record sales of EPYC server CPUs and Ryzen processors. The company generated a record free cash flow of $1.2 billion, despite an $800 million inventory write-down resulting from U.S. export restrictions on Instinct MI308 chips to China.
Despite this, the data center remains the key revenue driver, with revenue increasing 14% year over year to $3.2 billion, driven by the rapid adoption of the company’s fifth-generation EPYC CPUs by both cloud and enterprise customers.
Increasing enthusiasm about AMD’s next-generation MI350 series AI accelerators can prove to be a major near-term catalyst. While the Instinct MI300 and MI325 accelerators continued to gain traction in the second quarter, the company’s recently launched Instinct MI350/355 series began volume production ahead of schedule in June 2025.
The company highlighted that its MI355 chips (within the MI350 family) match or exceed Nvidia’s Blackwell architecture-based B200 chips, especially in AI inference workloads, at significantly lower cost. Since escalating costs are a significant headwind for data centers, the apparent cost advantage may prove to be a key differentiator for the Instinct MI350 series. Management anticipates a considerable production ramp for the MI350 series in the second half of 2025, aimed at supporting demand from multiple customers.
With 7 of the top 10 AI model builders now using Instinct GPUs, AMD’s credibility in the AI compute market is rising sharply. Thanks to its cutting-edge inference performance, AMD is also making rapid inroads in the sovereign AI market, as evident from the multibillion-dollar HUMAIN deal with the Kingdom of Saudi Arabia.
AMD is also working on improving the performance, usability, and adoption of its open-source ROCm software stack, which is designed to optimise GPU computations. The company released ROCm 7.0, introducing major upgrades across the software stack. ROCm 7 delivers more than three times higher training and inferencing performance gains compared to the prior generation. AMD has launched a developer cloud for easy GPU access and the new ROCm Enterprise AI platform to accelerate AI adoption among enterprises.
At 42 times forward earnings, AMD’s stock is not cheap. However, the combination of strong financials, deepening AI adoption, and highly anticipated September investor updates suggests the stock could gain meaningful momentum in the near term.
Ambarella
Once known primarily for its video and imaging chips, Ambarella (NASDAQ: AMBA) has now emerged as a prominent player in the edge AI market. Its proprietary CVflow architecture combines traditional computer vision algorithms with neural network techniques on a single system-on-chip (SoC). Ambarella is using this hybrid AI approach to power applications in various edge applications across areas such as security, robotics, and automotive systems.
The company’s recent financial performance highlights its business momentum. In the second quarter of its fiscal 2026 (ended July 31, 2025), Ambarella’s revenue jumped 49.9% year over year to $95.5 million, ahead of the company’s guidance. Non-GAAP earnings per share of $0.15 also beat estimates by $0.10. Management now expects revenue to grow by 31% to 35% in fiscal 2026.
Edge AI now accounts for roughly 80% of total revenue. The company’s 5-nanometer AI SoCs are in high demand for edge AI applications, including smart homes, automotive safety, and enterprise security. The company is also rapidly expanding into new markets, including portable video, robotic aerial drones, and edge AI infrastructure. Management has highlighted that the company is witnessing a rise in both unit shipments and average selling price.
Ambarella has already shipped more than 36 million edge AI processors to hundreds of customers, enabling them to port and run advanced AI models directly on Ambarella’s SoCs. Customers such as Insta360, Honeywell, and Samsara are already designing AI-powered video products around Ambarella’s chips, validating its competitive edge.
Investor attention could increase further in September, when Ambarella presents at Citi’s Global TMT Conference on Sept. 3, hosts KGI Securities Bus Tour on Sept. 4 and Bernstein’s Seventh Annual West Coast Semiconductor Bus Tour on Sept. 16, and meets investors at Craig-Hallum’s Midwest NDR on Sept. 18 and 19. These events could highlight the company’s expanding role in edge AI and act as short-term catalysts.
At more than 162 times forward earnings, Ambarella is not a cheap stock. However, with rapidly improving topline performance and a differentiated hybrid AI strategy, the stock seems to be in an early growth stage. It could continue its upward momentum in September and beyond.
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Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Broadcom and Samsara. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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