The Trust said NVIDIA and Broadcom are experiencing the biggest surge in demand for artificial intelligence chips.
On Friday, analyst William Stein reiterated his buy ratings on Nvidia shares (ticker: NVDA) and Broadcom shares (AVGO). He also raised his price target on Nvidia to $545 from $470 and Broadcom to $942 from $890.
The analyst said only two chip makers had “meaningful upside at the moment” in this segment, citing a sparing relationship with chip buyers.
In early Friday trading, Nvidia shares rose 3.9% to $477.90 and Broadcom shares rose 0.4% to $893.99.
The analyst became more optimistic about Nvidia’s AI business for data centers after speaking with several other industry insiders. He believes Nvidia may raise prices in the coming quarters to capitalize on strong demand for its chips.
Nvidia’s products will be more exposed to generative AI, the trend of the year. This technology takes text, images, and videos to create content. Interest in this form of AI was sparked by ChatGPT, which OpenAI released late last year.
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For Broadcom, Stein believes orders for powerful AI chips are coming from Google as semiconductors of its own design.
Wall Street is generally positive on NVIDIA stock. Eighty-six percent of analysts covering the company have a buy or equal rating on the stock, and 12 percent have a hold rating, according to FactSet. By contrast, about 81% of analysts rate Broadcom stock as a “buy” and 15% rate it as a “hold.”
Email Tae Kim (tae.kim@barrons.com).
