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Nvidia (NVDA) shares have witnessed a setback over the past week due to its latest results. However, for those seeking to diversify their investments in the chip sector, there are several other options available.

Diverse Chip Stocks Amidst Nvidia's Volatility

Nvidia's Recent Performance

Shares in chipmaking giant Nvidia have seen a 7% decline over the past five days following the release of its highly anticipated third-quarter results. Although key metrics exceeded expectations, investors were disappointed by a decline in gross margins and the company's revenue guidance. Nvidia posted revenue of .1bn (£27.8bn) for the third quarter, ahead of analysts' estimates of .2bn. Earnings per share came in at {{royaItemContent}}.81, compared to expectations of {{royaItemContent}}.74. However, gross margins decreased from 75.1% to 74.6% quarter-on-quarter. Nvidia had recently overtaken Apple (AAPL) as the world's most valuable publicly traded company but has now slipped back to second place, with a market valuation of .3tn, not far behind Apple's .5tn.Another factor weighing on Nvidia's stock is concerns about potential restrictions on China's access to chips. Bloomberg reported that the additional restrictions being considered by the US administration could be less strict than previously proposed. A spokesperson from the US Commerce Department's Bureau of Industry declined to comment.Despite the recent decline, Nvidia shares are still up by 173% year-to-date, and Wall Street analysts have raised their price targets on the stock. However, the company's stock has been volatile, with a 50% drop in 2022 and an 83% fall in 2002 after the dot-com bubble burst.

Other Chip Stocks to Consider

Dutch company ASML rose on Thursday as it manufactures lithography machines crucial for chip production. Barclays equity researchers Simon Coles and Rohan Bahl maintained an overweight rating on ASML, saying the company's recent capital markets day was "largely reassuring." In its third-quarter results, ASML cut its sales forecast for 2025, expecting net sales to rise between €30bn (£24bn) and €35bn. Coles and Bahl left their 0 price target on the shares unchanged, believing ASML is a "quality company" with a strong long-term story.Another European stock to own in 2025 is Besi, a chipmaking parts supplier. Coles said Besi is "poised to benefit from a continued industry-wide expansion into advanced packaging." The company already has a dominant market position in "hybrid bonding" and has the potential to expand into thermal compression bond. Although recent results showed missed estimates in the third quarter, the company expects a jump in demand for its hybrid bonding systems in 2025. The stock is down nearly 19% year-to-date, but Barclays' team believes it could generate an upside of 36%.The Taiwan Semiconductor Manufacturing Company (TSMC) is a bellwether of the industry. When it released its latest better-than-expected results, chip stocks rallied. TSMC's Taiwan-listed shares are up nearly 68% year-to-date. In the third quarter, revenue was up 36% year-on-year to .5bn (£18.5bn), and the company expects revenue in the fourth quarter to be between .1bn and .9bn. TECHnalysis Research president and chief analyst Bob O'Donnell believes TSMC is a "much better bellwether" for the AI chip trade, indicating strong demand that is expected to continue.German chipmaker Infineon's shares are down 21% year-to-date but rose following its recent results, suggesting a turnaround by the end of 2025. Revenue was down 6% year-on-year in the fourth quarter to €3.9bn, and down 8% for the year at €14.9bn. Bloomberg reported that Infineon expects a drop-off in sales in its fiscal first quarter but a recovery following this dip.Deutsche Bank Research technology equity analyst Johannes Schaller lowered his target price on Infineon's stock from €40 to €38 but maintained a buy rating. He also had a buy rating on Paris-listed STMicroelectronics, with a target price of €32 compared to its closing price of €23.75 on Thursday. STMicroelectronics' management expects to achieve approximately bn of revenue by 2027/28, with a compound annual growth rate of around 8% to 11%. Gross margins are expected to improve to 44-46%.Barclays' Coles and Bahl noted in a recent note that the recent investor event showed multiple opportunities for STMicroelectronics, including in auto microcontrollers, AI, satellite, and power. They maintained an "equal weight" rating on the stock with a price target of €25.While these stocks have not reached the heights of Nvidia and have faced some challenges recently, there are signs of recovery, and they are cementing their positions in the global chip industry.Download the Yahoo Finance app, available for Apple and Android.