Unlocking the Future: Semiconductor Stocks Poised for Explosive GrowthThe stock market has been on a remarkable run, with the S&P 500 surging 49% since its 2022 low. While this bull market is still in its early stages, history suggests investors could be in for several more years of impressive gains. At the forefront of this rally are leading semiconductor makers, particularly those serving the burgeoning artificial intelligence (AI) market. Two Wall Street analysts have identified two stocks that could be poised for outsized returns in the years ahead.

Uncovering the Next Semiconductor Superstars

Arm Holdings: The Brains Behind the AI Revolution

Arm Holdings (NASDAQ: ARM) has seen its share price soar over the past year, and for good reason. As data centers and device manufacturers increasingly turn to Arm-based chips for their high performance and energy efficiency, the company is poised to be a key beneficiary of the AI revolution. Arm's licensing and royalty-based business model is highly profitable, with an adjusted operating profit margin of 48% – a feat few companies can match.Arm's chips are already ubiquitous in the smartphone market, but the company is also making significant inroads in other sectors, including consumer electronics, cloud computing, networking, automotive, and the Internet of Things. According to analyst Jason Ader of William Blair, the total addressable market for Arm's technology spans more than $200 billion in chip value across these diverse industries.As the semiconductor industry is forecast to grow by 10% annually, Arm's high-margin business model is well-positioned to capitalize on this tailwind. The company's revenue grew by an impressive 39% year-over-year in the last quarter, driven by growing royalties and market share gains. While the stock may trade at a premium valuation, investors who take a long-term approach and dollar-cost average into the position could be rewarded handsomely.

Marvell Technology: Powering the AI Data Center Revolution

Marvell Technology (NASDAQ: MRVL) is another semiconductor stock that is poised to benefit from the rise of generative AI. The company provides chips and software that enable faster data transmission, making it a critical player in the infrastructure powering AI-driven applications.Marvell's products are used across a wide range of industries, including self-driving cars, data centers, and consumer electronics. Analyst Suji Desilva of Roth MKM is particularly excited about the company's opportunity in custom AI chips. Last quarter, Marvell was ramping up its first two chips as part of its AI custom silicon program, and the company is forecasting an acceleration in data center revenue in the third quarter, with a higher contribution coming from these custom AI solutions.The infrastructure required for AI data centers is fundamentally different from traditional cloud infrastructure. These new data centers need thousands of AI accelerators, or GPUs, and these GPUs require significantly more robust networking systems to handle the massive data flows required for AI processing. This is driving strong demand for Marvell's leading electro-optics products.While Marvell did report a 5% year-over-year decline in revenue last quarter, this was primarily due to weakness in non-AI businesses, such as enterprise networking and carrier. However, these segments are already showing signs of stabilization, and management expects them to return to sequential growth in the third quarter. Once Marvell is firing on all cylinders, the stock could soar, making now an excellent time for investors to consider adding it to their portfolios.