Executive summary
- Market-level question: semiconductor valuation multiples 2025 are near multi-year peaks for several large-cap names; the market now prices platform/AI optionality more than baseline semiconductor revenue growth.
- Headline metrics: NVIDIA revenue Q2 FY2026 $46.7B; AMD Q2 2025 revenue $7.7B; Intel Q2 2025 revenue $12.9B; Broadcom Q3 FY2025 revenue $15.952B; TSMC Q2 2025 revenue $30.07B; Micron Q2 FY2025 revenue $8.05B.
- Valuation snapshot: NVDA’s market cap eclipses $4.4T and commands the largest premium; other giants trade at elevated EV/Revenue and P/E multiples relative to historical norms because markets price AI platform economics and memory/foundry supply tightness into future cash flows.
- Verdict (single sentence): semiconductor valuation multiples 2025 suggest the market has moved from cycle-to-cycle valuation toward platform-level optionality pricing; investors must separate durable secular growth (AI, cloud, advanced nodes) from cyclical revenue to determine whether giants are overpriced relative to their forward growth.
Summary fundamentals
Below are the latest reported headline fundamentals for representative large-cap semiconductor companies. Each bullet uses the company’s most recent quarterly release.
- NVIDIA Corporation (NVDA): Revenue $46.7B (Q2 FY2026); Data Center led the quarter; company commentary on H20 inventory and China sales included.
- Advanced Micro Devices, Inc. (AMD): Revenue $7.7B (Q2 2025); gross margin 40%; diluted EPS $0.54; non-GAAP gross margin 43%.
- Intel Corporation (INTC): Revenue $12.9B (Q2 2025); GAAP EPS $(0.67); non-GAAP EPS $(0.10); restructuring and impairment charges impacted GAAP results.
- Broadcom Inc. (AVGO): Revenue $15.952B (Q3 FY2025); GAAP net income $4.14B; adjusted EBITDA ~67% of revenue for the quarter.
- Taiwan Semiconductor Manufacturing Company (TSM): Net revenue $30.07B (Q2 2025), gross margin 58.6%, operating margin 49.6%.
- Micron Technology, Inc. (MU): Revenue $8.05B (Q2 FY2025); GAAP net income $1.58B; HBM and DRAM demand cited as drivers.
Each figure above is direct from the companies’ investor releases cited.
Detailed fundamental analysis
Why multiples expanded: growth vs optionality
Historically semiconductor multiples tracked cyclical demand and capital intensity. In 2024–2025 the narrative shifted: a few companies (notably NVIDIA) consolidated AI acceleration economics-high ASP GPUs + software + data-center elasticity-into platform valuations. That shift reweights valuation inputs from near-term revenue growth to multi-year stream-of-cash projections driven by AI infrastructure, software premiums and recurring data-center contracts. NVDA’s extraordinary market cap reflects this re-pricing.
TSMC and Micron moved higher because supply constraints (advanced-node wafers, HBM) and structural tightness in AI memory demand justify higher forward margins and higher multiples for capacity owners. Broadcom’s enterprise-software skew (post-VMware) and networking ASIC exposure add recurring revenue characteristics that lift enterprise multiples. AMD and Intel’s multiples are more mixed: AMD’s strong server/gaming cycles support a growth multiple, while Intel’s restructuring and one-off charges suppress forward P/E.
Revenue trends and concentration
NVIDIA’s Q2 FY2026 revenue $46.7B was overwhelmingly data-center driven; Blackwell and related GPU families account for most incremental sales. That concentration makes NVDA’s growth highly dependent on hyperscaler procurement cycles and supply allocation. AMD’s Q2 record revenue $7.7B shows EPYC and MI GPU traction but still far behind NVDA’s data-center scale. Intel’s revenue flatness reflects a mix of client softness and transitional foundry/IDM investments. TSMC’s foundry revenue ($30.07B) scales with customer GPU/server demand and node transitions. Micron’s $8.05B reflects a memory cycle with HBM crossing critical thresholds.
Investor action: when evaluating multiples, quantify how much revenue is structurally recurring (platform subscriptions, long-term foundry contracts) versus cyclical (inventory-driven server buys). The bigger the recurring bucket, the more defensible a higher multiple.
Margin drivers: software, node mix, memory pricing
Gross margin expansion in 2025 shows two archetypes:
- Platform + software (NVIDIA, Broadcom) where software attach and IP licensing yield very high gross margins and operating leverage. NVDA reported non-GAAP gross margins north of 70% tied to GPU and software economics.
- Capital-intensive foundry and memory (TSMC, Micron) where advanced-node pricing and capacity utilization govern margin. TSMC delivered a 58.6% gross margin and 49.6% operating margin in Q2 2025, reflecting pricing power on 3nm/5nm production. Micron’s memory margin improvement came from HBM pricing and high utilization.
Margin sensitivity analysis: a 200–400 bps swing caused by ASP erosion or model-cost increases can wipe out large fractions of implied future cash flow in high-multiple names-making multiple resilience fragile.
Balance-sheet strength and capital allocation
Cash generation differentiates survivors from over-priced bets. NVIDIA’s free-cash-flow and cash stockpile underwrite R&D and M&A optionality; TSMC’s capex is large but backed by long-term foundry relationships; Broadcom carries high acquisition-related debt but backs it with strong adjusted EBITDA. Intel’s balance sheet shows the effects of restructuring and impairments, which limit upside unless execution materially improves. Micron’s cash flow strengthened with cyclical memory margins.
Valuation multiples: TTM & forward lenses
Measure multiples two ways:
- TTM-based multiples (EV/Revenue, P/E) show current market conviction. NVIDIA’s market cap >$4.4T pushes EV/Revenue and P/E to extreme levels by historical semiconductor standards.
- Forward multiples normalize for expected growth. Analysts’ consensus EPS and revenue estimates compress apparent overvaluation for companies with high expected growth (AMD), but not for those with uncertain execution (Intel). Use forward EV/EBITDA for more stable cross-company comparisons in capital-intensive segments.
Momentum & technical snapshot
Below are representative technical readings (exact numeric values pulled from market-data aggregators at the time of writing). Technicals are useful tactical inputs but do not replace fundamental valuation work.
- NVIDIA (NVDA) – RSI(14) ≈ 69.9; MACD positive (MACD > signal); 50d SMA ≈ $176.75; 200d SMA ≈ $142.04; one-month outperformance vs Nasdaq; average daily dollar volume extremely high.
- AMD (AMD) – 50d SMA ≈ $165.46; 200d SMA ≈ $127.29; RSI neutral-bullish; MACD positive.
- Intel (INTC) – RSI ~48.35; MACD slightly positive; 50d SMA ~32.08; price neutral.
- Broadcom (AVGO) – 50d SMA ~336–338; 200d SMA ~253–327 across feeds; MACD positive; strong YTD performance in 2025.
- TSMC (TSM) – RSI ~53; MACD modestly positive; 50d SMA ~275; 200d SMA lower; momentum neutral-positive.
- Micron (MU) – RSI ~61.9; MACD positive; moving averages indicate buy bias on some aggregators.
Interpretation: technical momentum supports near-term continuation in several names, but high RSI readings on market leaders warn of shorter-term pullbacks.
Peer comparison
Compare growth, margin and leverage across three clusters: AI-platform, foundry/memory, diversified chip/SaaS hybrid.
AI-platform
- NVIDIA (NVDA): unmatched AI GPU scale; massive cash generation; outsized multiple.
- AMD (AMD): growing server GPU share and EPYC CPU traction; lower margin profile than NVDA but faster revenue growth historically.
Foundry / Memory
- TSMC (TSM): foundry pricing power, capex heavy but strong margins.
- Micron (MU): memory cyclicality; HBM and DRAM tailwinds support margins but volatility remains.
Diversified / Software skew
- Broadcom (AVGO): hardware + high-margin software (VMware) mix; high adjusted EBITDA margin and significant debt load.
Each peer set shows different justification for elevated multiples: platform dominance for NVDA, capacity for TSMC, memory tightening for Micron, and recurring software for Broadcom.
Latest earnings highlights & management guidance
Selected verbatim takeaways (≤25 words each) from recent company releases and calls:
- NVIDIA: “Revenue for the second quarter ended July 27, 2025, was $46.7 billion.”
- AMD: “Second quarter revenue was a record $7.7 billion.”
- Intel: “Second-quarter revenue was $12.9 billion, flat year-over-year.”
- Broadcom: “Revenue of $15,952 million for the third quarter, up 22 percent from the prior year period.”
- TSMC: “In US dollars, second quarter revenue was $30.07 billion, increased 44.4% year-over-year.”
- Micron: “Revenue of $8.05 billion; HBM revenue crosses $1 billion milestone.”
These comments are directly quoted from company investor releases.
Strategic moves, catalysts & risks
Strategic catalysts supporting higher multiples
- AI hardware ramps and hyperscaler procurement agreements (NVIDIA, AMD) underpin near-term revenue visibility.
- Foundry node transitions and capacity expansion (TSMC) lock in multi-year revenue streams at premium pricing.
- Memory (HBM) pricing and constrained wafer capacity lift Micron and supporting suppliers.
- Software and recurring revenue M&A (Broadcom + VMware) convert cyclical hardware cashflows into more stable, higher-margin recurring income.
Principal risks that argue against premium multiples
- Geopolitical/export restrictions can curtail China sales or require licensing (explicit example: GPU exports and H20 sales issues historically reported by NVIDIA).
- Memory and foundry cycles remain real: oversupply or aggressive capex can reverse price power.
- Execution risk: Intel’s restructuring and impairment charges show how missed node transitions or impairments can compress multiples rapidly.
- Valuation fragility: high multiples price perfection in growth, making names susceptible to negative revisions in demand, margins or customer concentration.
Valuation & scenario analysis
We build three scenarios (conservative / base / optimistic) for a stylized large-cap semiconductor leader (use-case: evaluate implied price multiple sensitivity for NVDA as primary example and then summarize for others). Inputs: current market cap and consensus forward revenue growth rates; EV/Revenue bands applied to forward revenue.
Example: NVIDIA (stylized)
Inputs: Q2 FY2026 revenue $46.7B; market cap ≈ $4.4T; forward revenue consensus growth assumed 30–40% in 2026–2027 depending on model adoption.
- Conservative scenario – EV/Revenue 15×: Assumes AI cycle cools, ASP erosion; implied enterprise value aligned to lower growth; price materially below current levels.
- Base scenario – EV/Revenue 30×: Assumes sustained Blackwell adoption, strong software attach and modest incremental margin expansion. Price approximates current market cap.
- Optimistic scenario – EV/Revenue 45×: Assumes platform dominance, software/recurring revenue scales aggressively, and cross-platform monetization elevates cashflows. Implied price materially above current market cap.
Interpretation: NVDA’s current market cap requires either sustained extraordinary revenue growth or a transition to platform margins as a large portion of revenue.
Cross-company scenario mapping (summary)
- AMD: base-case multiple justified by faster revenue growth but lower margins than NVDA; downside if server GPU momentum stalls.
- TSMC: base-case multiple reflects scarce advanced-node capacity; conservative case sees re-rating if foundry demand normalizes.
- Broadcom: multiples reflect software conversion; conservative scenario discounts VMware income after customer pushback risk.
- Micron: high volatility; conservative multiples apply if memory pricing weakens, optimistic if HBM tightness persists.
Valuation guidance: compute implied price ranges by applying chosen EV/Revenue bands to each company’s next-twelve-month revenue estimate, subtract net debt, and divide by diluted shares. Recalculate with live data before trade execution.
Trading checklist & signals
Concrete rules for traders and longer-term investors.
Momentum traders (short–medium term)
- Entry: buy after a clean daily breakout above the 50-day SMA with MACD > signal and RSI between 50–70; confirm with sector relative strength (SOX or XSD above 50-day SMA).
- Stop: initial stop 7–12% below entry; tighten to breakeven after +10% gain. Exit immediately on MACD negative crossover with volume expansion.
- Sizing: cap a single name to 2–4% of portfolio; NVDA or TSM may warrant smaller sizing given outsized dollar volatility.
Long-term investors (fundamental)
- Sizing: limit individual large-cap semiconductor exposure to 1–3% of total portfolio unless concentrated thematic allocation is intentional.
- Confirmatory indicators before adding to positions: (1) multi-quarter revenue beat and upward guidance, (2) gross margin resilient or expanding, (3) free cash flow conversion improving, (4) non-earnings risks (geopolitics, concentration) mitigated by customer diversification.
- Rebalance triggers: two consecutive quarter guidance misses, a 20% downgrade in consensus revenue CY over 12 months, or material regulatory action.
