Artificial intelligence chip stocks rose Friday amid encouraging reports from Wall Street analysts. Nvidia stock was among the gainers.
BofA Securities analyst Vivek Arya pounded the table for a portfolio of AI chip stocks, citing a "generational capex cycle in generative AI infrastructure."
The data center market "remains one of few bright spots" in third-quarter semiconductor earnings reports, he said.
The four major U.S. hyperscale cloud computing companies — Alphabet's Google, Amazon, Meta Platforms and Microsoft — likely will continue to spend heavily on AI data center gear, he said. And that, in turn, bodes well for AI chipmakers.
AI beneficiaries among chip stocks are Nvidia, Broadcom, Marvell Technology, Micron Technology and Advanced Micro Devices, Arya said. His "top picks" are Nvidia and Broadcom.
On the stock market today, Nvidia stock rose 0.8% to close at 141.54. Broadcom advanced 1% to 173. Marvell was up most of the day but ended the regular session down 0.4% to 81.61. Micron climbed 1% to 107.91. And AMD improved 1.8% to 156.23.
Nvidia Stock Is On Six IBD Lists
Cloud capital expenditures in the third quarter rose an estimated 54% year over year to $62 billion worldwide, Arya said. For the full year, cloud capex is tracking to $237 billion, up 46%.
For 2025, global cloud capex is forecast to rise 15% to $272 billion, Arya said.
Elsewhere on Wall Street, Piper Sandler analyst Harsh Kumar called AMD his "top large-cap pick" among chip stocks. He rates AMD stock as overweight, or buy, with a price target of 200.
He sees AMD closing a competitive gap with AI chip leader Nvidia through its planned purchase of ZT Systems. Meanwhile, momentum is building for AMD's AI accelerators, Kumar said.
In the AI chip market, Kumar also has positive ratings for Nvidia, Broadcom and Micron.
AI chip stocks are well represented on IBD stock lists.
Nvidia stock is on six IBD lists: IBD 50, Leaderboard, Sector Leaders, Stock Spotlight, SwingTrader and Tech Leaders.
Broadcom is on two IBD lists: Big Cap 20 and Tech Leaders. And AMD is on the Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
