Rising bond yields have rattled parts of the stock market, yet attention around Nvidia and AI data center stocks keeps pulling investors back. Volatility is forcing harder choices about which AI stories feel durable and which feel crowded, and that creates both risk and potential opportunity. This article walks through three AI and data center semiconductor stocks that screen as positively exposed to the latest news and explains what that might mean for your watchlist.

The three AI and data center semiconductor stocks that follow are just a sample, and the full screen surfaced 27 more companies with equally compelling narratives that are not covered here. If you want to go deeper into this theme, head straight into the Artificial Intelligence (AI) and Data Center Semiconductor Stocks screener to analyze, compare, and identify the ideas that best fit your own criteria.

FormFactor (FORM)

FormFactor is a test and measurement company behind the probe cards and systems used to verify advanced chips, including GPUs, accelerators and high bandwidth memory that power AI and data center workloads. The bulk of its revenue comes from Probe Cards at about US$747 million, with the Systems segment contributing around US$155 million. With a market cap of roughly US$8.9b, FormFactor fits the larger cap, AI linked semiconductor hardware profile of this screener.

FormFactor gives you exposure to AI data center spending from a different angle, sitting in the test step that every high end chip must pass through rather than in the chips themselves. Rising demand for generative AI, HBM and co packaged optics has supported record results and a larger pipeline, while a broad customer base across memory, foundry and custom ASICs helps smooth some of the usual chip cycle swings. The catch is that margins and earnings still depend heavily on product mix, tariffs and a few big customers, and the stock has seen sharp share price swings and insider selling this year. If you want AI exposure with real manufacturing depth rather than focusing on GPU names alone, FormFactor is worth a closer look.

FormFactor’s AI testing role is expanding, and the real story is how that exposure lines up with its customer concentration and earnings sensitivity. See how the pieces fit in the 3 key rewards and 3 important warning signs (1 is major!)

ASE Technology Holding (TWSE:3711)

ASE Technology Holding is one of the largest outsourced semiconductor assembly and test providers that packages and tests chips used in AI accelerators and data center processors, making it a key behind the scenes player for this screener’s AI and data center theme. The business is anchored in Packaging at about NT$360.1b in revenue and EMS at roughly NT$293.4b, with Testing contributing around NT$84.6b and smaller activities grouped under Others. With a market cap near NT$2.6t, ASE Technology Holding is a heavyweight in the global semiconductor supply chain rather than a niche specialist.

Investors looking beyond headline GPU stocks may want ASE Technology Holding on their radar because it connects directly to AI data center growth through advanced packaging, testing and a new panel level packaging line aimed at high end AI and HPC chips. Recent results show stronger margins as higher value services gain traction, yet the company also carries meaningful debt, faces currency and geopolitical risks and has seen share price volatility that tracks AI sentiment and bond yield moves. The key question is whether its scale, technology roadmap and AI exposure justify these trade offs once you look more closely at earnings quality, capital intensity and how dependent it is on the AI cycle itself.

ASE Technology Holding’s scale and AI packaging momentum can look appealing. Yet the real story comes into focus once you weigh earnings quality, capital needs and AI cycle exposure in the 2 key rewards and 3 important warning signs

Silicon Motion Technology (SIMO)

Silicon Motion Technology designs NAND flash controllers that sit inside solid state drives used in PCs, smartphones and, crucially for this screener, enterprise and hyperscale data centers that power AI training and inference. The business currently reports all of its revenue, about US$1.3b, from developing controllers for solid state storage devices under the SMI and Ferri brands. With a market cap of roughly US$8.8b, Silicon Motion Technology is a mid sized player in global storage hardware with direct links to AI related data center demand.

Silicon Motion Technology provides a way to gain exposure to AI driven data center and storage spending through controllers that many hyperscalers and NAND makers rely on, rather than through GPUs themselves. Management is focusing on AI storage with products like MonTitan enterprise controllers, while partnerships across NAND makers and automotive and cloud customers aim to support growth and margin resilience. On the other hand, the company faces exposure to sharp price competition, customer concentration and higher R&D and funding needs, particularly as it relies on debt and is subject to geopolitical and currency risks. For investors assessing whether the AI storage narrative and the current valuation remain aligned, this is a company that warrants a closer look.

Silicon Motion Technology’s AI storage story is accelerating, yet most of the focus stays on GPUs. Learn how its controller pipeline, customer mix and funding needs compare in the analysis report for Silicon Motion Technology

Seeking Alternatives Before Momentum Flies

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.