Semiconductor stocks: these are “the four horsemen of AI”

According to a Wall Street analyst, four semiconductor stocks are proving to be the big winners in the generative artificial intelligence spending boom.


These semiconductor stocks are Advanced micro-systems (AMD), Broadcom (AVGO), Marvell Technology (MRVL) and Nvidia (NVDA), said Angelo Zino, analyst at CFRA Research.

In a note to clients Tuesday night, he called them “the four horsemen of AI.” Zino was referring to college football’s Four Horsemen of Notre Dame rather than the biblical Four Horsemen of Revelation.

Zino reiterated his buy ratings on all four semiconductor stocks. He said he sees “a permanent shift in infrastructure spending from data centers to network accelerators and upgrades,” which will benefit the foursome.

Nvidia dominates the AI ​​computing market

Of these semiconductor stocks, Nvidia has the strongest position in the booming AI market.

“Nvidia has the largest representation of AI-related revenue, followed by AMD, Broadcom and Marvell,” Zino said.

He added: “We believe Nvidia’s GPUs (graphics processing units), software capabilities, recent entry into CPUs (central processing units) and networking expertise make it a standout player. for the coming years.”

The emergence of generative AI as a flagship application for artificial intelligence has kicked off a massive upgrade cycle for data center hardware, Zino said.

Generative AI can create content, including written articles, images, videos, and music, from simple descriptive sentences. Artificial intelligence systems analyze and digest large amounts of data to create new works. Generative AI can also write computer programming code.

Semiconductor Stocks on IBD Technology Leaders List

During this time, Nvidia has evolved from a semiconductor company to a complete system supplier.

“When all is said and done, we believe Nvidia will be seen as the poster child for all things AI (similar to what Apple (AAPL) meant to mobility, Amazon (AMZN) to e-commerce, and netflix (NFLX) to streaming),” Zino said.

Investors shouldn’t fear the lofty valuations of the four semiconductor stocks, given the huge growth opportunity ahead, Zino said.

Zino has a 12-month price target for Nvidia shares of 480. His price target is 145 for AMD shares, 975 for Broadcom shares and 70 for Marvell.

In trading today, Nvidia stock fell 1.7% to close at 430.45. Meanwhile, AMD stock fell 5.7% to 112.11. Broadcom fell 1.8% to 847.66. And Marvell fell 3.3% to 58.85.

All four semiconductor stocks are on the IBD Tech Leaders list.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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