Bank of America: NVIDIA, Broadcom, Micron are the top choices in the AI field, with emerging competitors expected to experience explosive growth
Bank of America securities analyst Vivek Arya has published a research report on the field of artificial intelligence. He has identified NVIDIA and Broadcom as preferred investment targets, giving them a buy rating. Arya also pointed out that Marvell Technology, Micron Technology, and AMD are emerging competitors poised for explosive growth. In addition, Arya predicts that the demand for HBM will grow at a compound annual growth rate of 48%, and Micron Technology's market share will expand to around 25%. Overall, the development of the artificial intelligence field will drive growth for related companies
According to the Zhitong Finance and Economics APP, recently, Bank of America securities analyst Vivek Arya published a research report on the field of artificial intelligence, stating that his top picks in this field are NVIDIA (NVDA.US) and Broadcom (AVGO.US). The reason is that the adoption of accelerators/artificial intelligence servers represents a generational shift, and NVIDIA and Broadcom are leaders in this regard. Currently, the analyst has a "buy" rating on NVIDIA with a target price of $1100 and a "buy" rating on Broadcom with a target price of $1680.
However, the analyst also pointed out that the rising trend in the accelerator market - with the market size expected to reach $200 billion in the next three years - may bring unstable but rewarding opportunities to the second-ranked suppliers. This includes Marvell Technology (MRVL.US) (ranked second in the field of artificial intelligence networks, a rising star in the custom chip field), Micron Technology (MU.US) (likely to rapidly expand its market share in high-bandwidth memory or HBM market, but lagging behind its Korean peers), and AMD (AMD.US) (ranked second in the GPU field and third in the artificial intelligence accelerator supplier ranking).
The analyst added that interestingly, the trading valuations of each second-tier AI participant here are higher than the leaders in their respective fields, so it is expected that the stocks of these companies will experience greater volatility. However, as the leaders expand the potential market size, second-tier participants may continue to explore profitable niche markets. Currently, the analyst has a "buy" rating on Marvell Technology with a target price of $95 and a "buy" rating on AMD with a target price of $195.
Arya expects that from 2023 to 2027, the demand for HBM will grow at a compound annual growth rate of 48%, reaching $20 billion, and Micron Technology's market share will expand from less than 5% to around 25%, helping the company achieve record total sales in 2025-2026.
The analyst stated that as artificial intelligence expands to the edge through higher-spec smartphones, PCs, and other smart/connected devices, the memory chip industry will also benefit from this trend. He raised Micron Technology's target price from $120 to $144.
Although AMD lags behind in terms of maturity in its numerous software and developer bases, Arya predicts that AMD will leverage its chip architecture to advance faster to the 3nm node in artificial intelligence products by 2026.
Arya predicts that the artificial intelligence accelerator market will double from around $900 billion in 2024 to reach $1.8 trillion by 2027, even reaching $2 trillion He expects NVIDIA to maintain or expand its market share of over 75%, with custom chips (ASIC) accounting for 10-15% share, and the remaining 10-15% taken up by other commercial accelerator options (AMD, Intel, and other private companies)