The hype around artificial intelligence is causing concerns of a potential bubble in AI stocks. It remains uncertain if we are indeed in bubble territory. However, there is no denying the significant outperformance of AI-related stocks, especially those involved in manufacturing microchips and semiconductors that drive the technology. Consequently, this has led to the rise of AI chip stocks to buy.

Nvidia (NASDAQ:NVDA) alone has witnessed a 200% surge in its share price since January. Other chipmakers have also experienced substantial growth due to the soaring demand for chips and semiconductors powering AI. The duration of this trend and the eventual winners and losers in the global AI competition are unpredictable. Nevertheless, the momentum of the AI industry remains strong.

Here are three stocks to consider buying due to the increasing demand for AI chips.

Taiwan Semiconductor (TSM)

Few if any companies are as likely to benefit from the gold rush in AI chips as Taiwan Semiconductor Manufacturing Co. (NYSE:TSM). Regardless of which companies design the chips and semiconductors that enable artificial intelligence applications and platforms, chances are the technology will be manufactured by Taiwan Semiconductor. That is because TSM is one of the few companies in the world that actually carries out the highly specialized work involved in manufacturing semiconductors and microchips.

Taiwan Semiconductor currently dominates the chip and semiconductor market, producing approximately 60% of the world’s supply. This near monopoly gives the company a unique advantage in the global sector. As the demand for AI chips increases, the stock of TSM has been experiencing an upward trend. So far this year, the company’s share price has surged by 41%, with a significant portion of that growth occurring since mid-May. Looking at a five-year period, the stock has seen a remarkable increase of 175%. Despite the recent surge, TSM stock has not reached its 52-week high yet. Investors who enter the market at this point could potentially reap substantial rewards. Therefore, TSM is among the AI chip stocks worth considering for investment.

Marvell Technology (MRVL)

After a being knocked around throughout 2022, Marvell Technology’s (NASDAQ:MRVL) stock is flying high this year as the hype surrounding AI builds to a crescendo. So far in 2023, MRVL stock has gained an impressive 70%. And 40% of that gain came during one week recently. MRVL stock is now up 30% over the last 12 months and has increased 187% in the past five years. In addition to pushing into AI, Marvell is also a leading chip developer for electric vehicles, another sector that is catching fire right now.

During a recent earnings call, Marvell’s management team talked up how the company’s chips are helping to power popular chatbots such as ChatGPT. Senior brass also emphasized that Marvell’s revenue from AI is expected to double this year to at least $400 million and then double again in 2024 to $800 million. That forecast led MRVL stock to pop 40% in only a few days. Going forward, the company expects that half of its custom chip work will be related to AI, up from 20% currently. Music to investors’ ears.

Advanced Micro Devices (AMD)

Shares of Advanced Micro Devices (NASDAQ:AMD) continue to run at a red hot pace. YTD, the company’s share price has increased 88%, bringing its gains over the last five years to 660%. Analysts are tripping over each other to revise up their price targets on AMD stock as the current bull run shows no signs of slowing down. AMD stock has been particularly hot since news broke that the company is partnering with Microsoft (NASDAQ:MSFT) on the development of a new AI chip and may also be developing its own AI superchip.

Investors should be aware that there is substance to be found in AMD stock apart from the current mania surrounding AI chipmakers. The company has a track record of strong financial outperformance, beating Wall Street consensus expectations in its most recent quarter despite slumping personal computer (PC) sales. Many analysts upgraded AMD stock after the Q1 earnings, which had nothing to do with the company’s involvement in AI. Bank of America (NYSE:BAC) lifted its target on the shares to $120 from $105 previously. This makes it one of those AI chip stocks to buy.

On the date of publication, Joel Baglole held long positions in NVDA, MSFT and BAC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.