Nanotechnology is not a novel concept. However, its application in a variety of areas is increasing at an exponential pace. That is why nanotech stocks are becoming the latest investment craze that is taking the markets by storm.

The stock market is keen to find the next biggest technology boom. So, it isn’t surprising nanotech stocks have gained steam in the last few months. Nanoscale opens up the prospects of new technologies and products because it operates on the atomic and molecular level.

But there is a bit of risk involved as well. Nanotechnology has its benefits, but it is relatively new. Plus, there is an argument we don’t fully understand the physical and chemical interactions that nanotechnology allows.

Regardless, the following five nanotech stocks are moving ahead and focusing on this area. Any breakthroughs that occur will significantly change the Nanotech is already being actively used in the computers, microchips, chemicals, and devices we use each day. But there is room for further growth.

So, without further ado, let’s take a deep dive on these five companies:

• Applied Materials (NASDAQ:AMAT)
• Intel (NASDAQ:INTC)
• International Business Machines (NYSE:IBM)
• Veeco Instruments (NASDAQ:VECO)
• Taiwan Semiconductor (NYSE:TSM)

Nanotech Stocks to Buy: Applied Materials (AMAT)

Applied Materials manufactures engineered materials for chips and displays for global semiconductor, display, and related industries.

It is the world’s largest supplier of semiconductor manufacturing equipment. It is heavily involved in the microchip industry, driven by reducing sizes and applying films on an atom-by-atom basis.

The company, offers materials engineering solutions to manufacture approximately every chip in the world. Due to its prime position within the market, the company did very well last year. The bottom line and the top line jumped by 52.9% and 28.5%, respectively.

The markets have also taken notice and rewarded the company handsomely. AMAT has outperformed the S&P 500 by 82.7% and its sector by 78.0% in the past year.

With a current gross margin of 45.8% and a net margin of 22.4%, do not expect the momentum to let up anytime soon. Plus, the recent breakthrough by the company, called selective tungsten deposition, has the industry buzzing.

Its Endura Volta Selective Tungsten CVD system allows semiconductors to selectively deposit tungsten in the transistor contact vias to reduce their resistance and increase transistor’s performance and reduce power consumption. In simpler terms, it is 3D printing at the atomic scale.

 Intel (INTC)

Intel is the world’s largest chipmaker. The Silicon Valley-based tech giant designs and manufactures microprocessors for the global personal computer and data center markets.

Although it pioneered the x86 architecture for microprocessors, it has recently lost market share to Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD).

Nevertheless, despite falling behind in the chip processors race for personal computers, Intel still maintains a healthy position in the market and has diversified into several other business areas. One of these segments is nanotech.

Recently, at the international VLSI conference, Mike Mayberry discussed the company’s goals in a presentation titled “The Future of Compute.”

Several new manufacturing technologies came under discussion within the presentation, including going beyond FinFET to Gate-All-Around structures or even to 2D Nano-sheet structures, before possibly leaving CMOS altogether.

Intel will use nanowire/nanoribbon transitions in volume in five years. It may seem like a slow transition, but the company’s next-generation chips are worth the wait. I

n the meantime, investors still have an excellent stock they can rely on. In the last five years, EPS has increased by 16.6% and sales by 6.5%, a very respectable record.

International Business Machines (IBM)

IBM is the most experienced and oldest company operating within the tech industry today.

After several reorganizations and mergers, it still stands as one of the world’s largest computer companies and systems integrators.

The company aims to take care of every aspect enterprise IT needs, providing infrastructure services, software, IT services, and hardware. Much like any other tech giant, the company has refused to rest on its laurels.

Headquartered in Armonk, New York, with operations in over 170 countries, IBM has at least a two-decade history in nanotechnology research.

Its IBM Research division worked in tandem with Singapore’s Institute of Bioengineering and Nanotechnology to develop a synthetic polymer that may help increase the effectiveness of existing antibiotics.

This partnership has largely gone unnoticed by the markets. It’s easy for the company’s nanotech work to get lost in the shuffle, especially when IBM is aggressively working on other high-growth areas like hybrid cloud, AI and quantum computing.

IBM bulls are not concentrating on the nanotech segment as a significant growth area right now, but in time, it will become one.

Nanotech Stocks to Buy: Veeco Instruments (VECO)

Veeco is a global capital equipment supplier principally engaged in manufacturing thin-film process equipment.

It specializes in manufacturing 3D transistors and 3D memory.

The company’s devices are used for LED lighting, communication networks, advanced packaging, data storage, advanced computing, mobile devices, and key emerging applications like artificial intelligence, machine learning, and 5G.

Nanotech is not a significant contributor to the company’s bottom line. Nevertheless, Veeco has inked a deal with Aledia, a developer and manufacturer of next-generation advanced display applications, to supply Veeco’s Propel 300 HVM metal-organic chemical vapor deposition (MOCVD) system with high-resolution microLED displays.

Taiwan Semiconductor (TSM)

Founded in Taiwan in 1987 by Morris Chang, TSMC is the world’s largest semiconductor foundry.

Historically, chipmakers fabricated their own chips. Nowadays, foundries and architecture take care of chipmaking, and the chipmaker itself concentrates on engineering instead.

Hence, these “fabless” chip companies turn to Taiwan Semiconductor to demand new chips for phones, televisions, networks, gaming consoles, or server farms.

The U.S. depends heavily on the company’s chip-making technology and wants it to build more plants here. China, Germany, and Japan all want Taiwan Semiconductor fabs.

The foundry leader has an illustrious customer base, including Apple (NASDAQ:AAPL) and Nvidia, and several other important names in the space.

TSM was the first foundry to manufacture 7-nanometer chip production in scale volumes. It has now perfected extreme ultraviolet lithography (EUL) techniques that will let it make chips with circuit lines just 2 nm apart secure its technology leadership.

On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.