Wall Street analysts say four semiconductor stocks are big winners in the generative artificial intelligence spending boom.
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Those semiconductor strains are Advanced Micro Devices (AMD), broadcom (AVGO), marvel technology (MRVL) and Nvidia (NVDA) and CFRA Research analyst Angelo Zino.
In a memo to customers late Tuesday, he called them the “Four Horsemen of AI.” Gino was referring to college football’s Four Horsemen of Notre Dame, not the Four Horsemen of the Bible’s Book of Revelation.
Gino repeated his buy rating on four semiconductor stocks. He said “data center infrastructure spending will permanently shift to accelerator and network upgrades,” which will benefit the four companies.
Nvidia Leads the AI Computing Market
Among these semiconductor stocks, NVIDIA holds the strongest position in the burgeoning AI market.
“Nvidia has the highest revenue related to AI, followed by AMD, Broadcom, and Marvell,” said Zino.
He added, “Nvidia’s GPUs (graphics processing units), software capabilities, recent entry into CPUs (central processing units), and expertise on the networking side of things will make the company look forward to many years to come. We believe we are poised to deliver an outstanding performance,” he added.
The emergence of generative AI as the killer application of artificial intelligence has set in motion a massive upgrade cycle for data center hardware, Zino said.
Generative AI can create content such as articles, images, videos, and music from simple descriptions. Artificial intelligence systems analyze and digest vast amounts of data to create new works. Generative AI can also write computer programming code.
Semiconductor Stocks Listed on IBD Technology Leaders List
Meanwhile, NVIDIA has transformed from a semiconductor company to a total system provider.
“At the end of the day, we believe Nvidia will be seen as the poster child for all things AI (Like AI). apple (AAPL) stands for Mobility, Amazon (AMZN) to e-commerce, and Netflix (From NFLX to streaming),” Gino said.
Gino said investors shouldn’t fear rising valuations of the four semiconductor stocks given the huge growth opportunities ahead.
Zino has a 12-month target price for NVIDIA stock of 480. His price targets are 145 for AMD, 975 for Broadcom, and 70 for Marvell.
On the stock market today, Nvidia shares fell 1.7% to close at 430.45. Meanwhile, AMD shares fell 5.7% to 112.11. Broadcom fell 1.8 percent to 847.66. And Marvel fell 3.3% to 58.85.
All four semiconductor stocks are on the IBD Tech Leaders list.
Follow Patrick Seitz on Twitter. @IBD_PSeitz For more articles on consumer technology, software and semiconductor stocks, please visit here.
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