Antonio Bordunovi
Chipmakers and designers such as NVIDIA (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing (NYSE:TSM) and Broadcom (NASDAQ:AVGO) have seen impressive run ups in their stocks over the past few months, thanks largely to the AI revolution stoking increased demand for their products.
Since the beginning of the year, NVIDIA (NVDA) shares have soared 161%, while shares of TSM (TSM) have rallied 80% and Broadcom (AVGO) 52%. Advanced Micro Devices (NASDAQ:AMD) and Marvell (NASDAQ:MRVL) have also scored significant gains, with both stocks up over 20% year-to-date.
Which brings us to today’s SA Asks investment question: What are the best chip stocks to invest in right now?
We asked SA analysts Jonathan Weber, Michael Del Monte, Uttam Dey and Jere Wang of JR Research for their picks.
Jonathan Weber: For pure AI exposure, NVIDIA (NVDA) is the king. For more broad-based exposure, I like Taiwan Semiconductor Manufacturing Company (TSM) as it benefits from growth at all kinds of chip players, including NVIDIA (NVDA), AMD (AMD), and many more. There is, however, some geopolitical risk to investing in TSM (TSM), which shouldn’t be neglected.
Michael Del Monte: NVIDIA (NVDA) is a clear winner of the GPU race. AMD (AMD) is a close second with Intel (NASDAQ:INTC) as a clear avoid at all costs. Micron Technology (NASDAQ:MU) still has significant upside potential. Broadcom (AVGO) plays a crucial role in virtual networks and infrastructure. QUALCOMM (NASDAQ:QCOM) is going to lag with flat smartphone sales.
Uttam Dey: Any chip company that can continue to benefit from expanding Capex spending or growing end-user markets. AMD (AMD), QUALCOMM (QCOM), and Impinj (NASDAQ:PI) are all seeing their end markets begin to grow or re-accelerate. On the other hand, TSM (TSM), NVIDIA (NVDA) and Broadcom (AVGO) will continue to benefit from the growing data center Capex spend, which is expected to increase by 38% CAGR to $1 trillion through 2027.
Jere Wang: I believe the AI hype is sustainable. NVIDIA (NVDA) is the King of AI, so having a core exposure makes sense. AMD (AMD) should also expand its market share. Networking players like Broadcom (AVGO) and Marvell (MRVL) are also key players. And don’t forget foundry leader TSMC (TSM).
