Artificial intelligence chip stocks saw a rise on Friday due to positive reports from Wall Street analysts, with Nvidia (NVDA) stock being one of the gainers.
BofA Securities analyst Vivek Arya expressed strong support for a portfolio of AI chip stocks, highlighting a “generational capex cycle in generative AI infrastructure.”
Arya mentioned that the data center market continues to be a bright spot in third-quarter semiconductor earnings reports. He pointed out that the major U.S. hyperscale cloud computing companies such as Google, Amazon, Meta Platforms, and Microsoft are likely to continue heavy spending on AI data center equipment, which is good news for AI chipmakers.
Arya identified Nvidia, Broadcom, Marvell Technology, Micron Technology, and Advanced Micro Devices as beneficiaries in the AI chip sector. He specifically recommended Nvidia and Broadcom as his top picks.
During midday trading, Nvidia stock rose over 2% to 143.55, Broadcom advanced 2.7% to 176.01, Marvell increased slightly to 82.63, Micron climbed 2.1% to 109.10, and AMD improved 2.6% to 157.50.
Cloud capital expenditures in the third quarter surged an estimated 54% year over year to $62 billion worldwide, according to Arya. He also noted that global cloud capex is on track to reach $237 billion for the full year, marking a 46% increase.
Arya’s forecast for 2025 predicts a 15% rise in global cloud capex to $272 billion.
On a different note, Piper Sandler analyst Harsh Kumar named AMD as his top large-cap pick among chip stocks. He has an overweight rating on AMD stock with a price target of 200.
Kumar believes that AMD is closing the competitive gap with AI chip leader Nvidia through its planned acquisition of ZT Systems. He also mentioned that momentum is building for AMD’s AI accelerators.
Kumar also gave positive ratings for Nvidia, Broadcom, and Micron in the AI chip market.
AI chip stocks have a strong presence on IBD stock lists. Nvidia is featured on six IBD lists: IBD 50, Leaderboard, Sector Leaders, Stock Spotlight, SwingTrader, and Tech Leaders.
Broadcom is listed on two IBD lists: Big Cap 20 and Tech Leaders. AMD is included in the Tech Leaders list.
For more stories on consumer technology, software, and semiconductor stocks, follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz.
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