Sandisk (SNDK -1.72%) and MaxLinear (MXL +2.63%) are two of the best semiconductor stocks to own. The entire industry has been a gold mine for long-term investors, even before the artificial intelligence boom took shape.
The VanEck Semiconductor ETF (SMH -0.65%) has delivered an annualized return of 30.3% over the past 15 years. It shows what types of gains you can find in semiconductor stocks, but Sandisk and MaxLinear look poised to exceed those excellent returns through 2032.
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Sandisk is securing multiyear deals while delivering robust sequential growth
Sandisk is one of the fastest-growing companies in the entire market. The NAND flash memory chipmaker reported 51% sequential growth in its fiscal 2026 fourth quarter, which was good for a 372% year-over-year growth rate. Sandisk reports its fiscal 2027 first-quarter results on Oct. 29, and there are already a few reasons to believe it will be a good report.
NASDAQ: SNDK
Key Data Points
Micron reports its earnings a little earlier than Sandisk, so investors can use the larger memory chipmaker as a gauge for how Sandisk may perform. Micron crushed guidance in its fiscal 2026 fourth quarter, with revenue up by 379% year over year. The chipmaker anticipated $50 billion in sales and ended up with $54.2 billion.
These results suggest that Sandisk will also exceed the top end of its guidance, which called for $10.8 billion in its fiscal 2027 first quarter. That implies a 20% sequential growth rate. Sandisk's superb revenue growth comes amid multiyear strategic customer agreements, which offer revenue visibility well into the future.
Continued memory chip shortages can help Sandisk outperform the broader market. The stock is already up by more than 600% year to date, and its 8 forward P/E ratio suggests that it is still undervalued. No matter how much a stock gains, it can still look like a bargain if its fundamentals grow faster than its stock price moves.
The valuation and Sandisk's financial growth rates give it a real shot at a $1 trillion valuation by 2032. That prediction suggests that the growth stock will more than quadruple from current levels.
MaxLinear is riding the AI data center wave
While Sandisk has made long-term investors wealthy over the past two years, MaxLinear looks to be at the start of that journey. Its market cap remains below $10 billion despite a 500% gain this year. MaxLinear develops microchips that are vital for optical fiber infrastructure.
NASDAQ: MXL
Key Data Points
Optical cables are a foundational part of any data center, as they make it easier for data to move throughout the facility. It's normal for large AI data centers to have hundreds of thousands of miles of fiber, with some data centers having millions of miles of optical cables.
That's a lot of cables, and it also means plenty of MaxLinear microchips are needed in data centers, but it's not the only player in the industry. Broadcom, Marvell Technology, and Credo Technology are some of its top competitors.
However, MaxLinear doesn't need a large slice of the pie to reward long-term investors. The industry is big and scaling rapidly, just like MaxLinear's market share. Revenue jumped 55% year over year in the second quarter, with MaxLinear's AI Infrastructure segment surging 145% year over year. The company also raised its guidance for its optical data center revenue, citing "robust customer orders and rising visibility of program ramps."
MaxLinear also believes in "continued upside potential" for that segment through 2027, which contributed to ambitious Q3 guidance. The company generated $168.8 million in Q2 and anticipates $220 million at the high end of its guidance range. That implies a 30% sequential growth rate.
An accelerating sequential growth rate helped Sandisk and Micron turn into some of the top performers in the entire stock market. MaxLinear is exhibiting that same pattern while being a much smaller company and expanding its margins.
