Nvidia, Meta Platforms, Alphabet, and Apple have collectively spent far more on this than they have on developing artificial intelligence (AI) solutions.

Seemingly overnight, artificial intelligence became a major growth industry. The AI boom is driving demand for semiconductors, which are crucial components in AI systems. Two compelling semiconductor companies to consider are Wolfspeed (NYSE: WOLF) and Advanced Micro Devices (NASDAQ: AMD).

This has turned out to be a forgettable year for Qorvo (NASDAQ: QRVO) investors as shares of the chipmaker are down 38% as of this writing, which is in stark contrast to the 23% gains clocked by the PHLX Semiconductor Sector index in 2024.

The stock also benefited significantly from a bullish report from Wedbush analyst Dan Ives, who raised the company's target price from $10 to $22. Palantir Technologies' (NASDAQ: PLTR) stock posted remarkable gains of almost 385% in 2024,

Year to date, shares of Palantir Technologies (NASDAQ: PLTR) have soared by 326% while shares of Adobe (NASDAQ: ADBE) have tanked by 20%. However, picking a stock based largely on its recent performance is a strategy fraught with risks. Past returns are not predictive of the growth potential of a stock.

Since Warren Buffett became the CEO of Berkshire Hathaway ( BRK.A 0.80%) ( BRK.B 0.95%) in 1965, its stock has delivered a compound annual return of 19.8%. That would have been enough to turn a $1,000 investment into $42.5 million, whereas the same investment in the S&P 500 would have grown to just $325,053 over the same period.