Wolfe Research has highlighted four Outperform-rated semiconductor chip stocks in the artificial intelligence sector due to their significant surge in recent years.
The demand for artificial intelligence has led to a surge in chip stocks, with Nvidia’s stock increasing by 220% over the last 12 months. This is due to the company’s semiconductor chips being crucial for AI models and applications. AMD, a competitor, has developed microchips specifically for AI models, resulting in a 76% increase in its stock.
Super Micro Computer, a data center and large enterprise supplier, has also seen a significant surge, jumping 784.5% in its stock. Micron’s stock has also seen a strong upward trajectory, with analysts predicting it will benefit from the surge in AI demand.
Wolfe Research is increasingly confident in the long-term outlook for the semi-cap equipment sector,
Highlighting Outperform-rated
Applied Materials Inc For Target $250
ASML Holding NV ADR For Target €930
Lam Research Corp For Target $980
KLA Corporation For Target $750
AMAT and ASML are preferred long-term SCE stocks for CY24/CY25 due to AMAT’s market position in DRAM, ASML’s increasing WFE share, DRAM makers adopting EUV at 1-alpha/1-beta processes, and foundry/IDMs spending on 3/2nm nodes.
KLAC predicts a 15% increase in CY25 street revenue due to memory spending rebound. The firm believes that KLAC will benefit more at the higher end of the inspection market. LRCX is positioned for continued HBM ramp and recovery in NAND, with a focus on 300+ layer investments. The timing of a recovery in NAND spending remains uncertain.
Must read book about investing – check here