- BofA analyst Vivek Arya believes chipmaker Nvidia Corp (NASDAQ:NVDA) could benefit from growth in several areas.
- Arya chose Nvidia as his top large-cap sector pick.
- Nvidia and fellow semiconductor businesses Marvell Technology, Inc (NASDAQ:MRVL) and Advanced Micro Devices, Inc (NASDAQ:AMD), can all immensely benefit from the continued growth in cloud computing, among other factors, Arya said.
- Arya also chose ON Semiconductor Corp (NASDAQ:ON) as his top small- to mid-cap pick, saying the company would benefit from its automotive technology.
- Previously semiconductor companies had fewer drivers than now, such as computers and smartphones.
- However, presently, there are multiple end markets served by a consolidated set of chip vendors, delivering proprietary products and generating solid free cash flow margins.
- Arya's top picks serve end markets where he expects spending/content growth drivers to be most resilient, such as cloud computing/AI, high-end industrial, EV/advanced driver assist systems and rising chip complexity.
- Semis look compelling on a relative basis vs. industrial/Infotech stocks in the S&P 500 index with catalysts like easing of China lockdowns could help re-energize investor interest back in the sector.
- Price Action: NVDA shares traded lower by 1.63% at $183.68 on the last check Wednesday.
- Photo via Wikimedia Commons
