Despite all the hype surrounding artificial intelligence and the growth of chipmaker company stocks, in 2025 the stocks of gold mining companies have proven to be a better investment.
Based on available data, the global index of gold mining company stocks (MSCI) has surged approximately 135 percent in the current calendar year. This is while the global index of semiconductor (chipmaker) companies has grown by only 40 percent. This performance gap represents the largest historic outperformance of gold stocks over chip stocks ever recorded.
Reasons for This Powerful Rally: This remarkable growth is primarily driven by the surge in gold prices themselves, which with an increase of more than 45 percent in 2025, is experiencing its best year since 1979. Extensive purchases by central banks, Federal Reserve interest rate cuts, and the de-dollarization trend are among the primary reasons for this price increase. This has directly led to an increase in the profit margins of mining companies.
Valuation Advantage: Another key difference is the valuation of these two sectors:
Gold mining stocks are trading at a price-to-earnings (P/E) ratio of 13, which is even lower than their five-year average.
Chipmaker stocks are trading at a P/E ratio above 29, which is significantly higher than their historical average.
According to analysts, despite the sharp rise in mining company stock prices, their valuations still appear attractive, as their profitability has grown faster than their stock prices.