Semiconductor stocks upgraded, Nvidia and AMD benefit from AI, Microsoft expands OpenAI partnership, Citi estimates $3B-$11B in sales for Nvidia.
Wall Street analysts are becoming increasingly bullish on semiconductor stocks as the market heats up for graphics chips used in artificial intelligence applications. Nvidia (NVDA) and Advanced Micro Devices (AMD) are expected to be among the biggest beneficiaries of the trend. Barclays analyst Blayne Curtis upgraded AMD, Qualcomm (QCOM) and Skyworks Solutions (SWKS) to overweight, or buy, from equal weight, or neutral. He also kept his buy rating on Nvidia stock and raised his price target to 250 from 170.
Microsoft (MSFT) recently announced a multiyear, multibillion dollar investment in OpenAI, the organization behind text generator ChatGPT and image generator Dall-E. Citigroup estimates that ChatGPT usage could result in $3 billion to $11 billion in sales for Nvidia over 12 months. Truist Securities analyst William Stein upgraded his view of semiconductor stocks to positive from neutral, citing Nvidia’s presence in AI computing, Monolithic Power Systems (MPWR) for share gains in analog chips, and Onsemi (ON) for adoption of silicon carbide chips in electric vehicles and other power applications.
The semiconductor market is being driven by the rise of generative AI, which describes computer algorithms that can create new content, including text, images, software code and more. AI applications are becoming increasingly important in data centers, PCs, and smartphones, and the semiconductor industry is expected to benefit from this trend.
Analysts are in agreement that Nvidia and AMD are the two main beneficiaries of the semiconductor stock rally, with the former being positioned to benefit from the rise of generative AI, such as ChatGPT. Microsoft’s investment in OpenAI is expected to further bolster Nvidia’s sales. Other semiconductor stocks such as Qualcomm (QCOM), Skyworks Solutions (SWKS) and Monolithic Power Systems (MPWR) are also expected to benefit.
Overall, Wall Street analysts are becoming increasingly positive on semiconductor stocks as some segments of the market heat up, including graphics chips for artificial intelligence. Nvidia (NVDA) and Advanced Micro Devices (AMD) are expected to be the main beneficiaries, with other semiconductor stocks such as Qualcomm (QCOM), Skyworks Solutions (SWKS) and Monolithic Power Systems (MPWR) also expected to benefit from the trend. Microsoft’s investment in OpenAI is expected to further bolster Nvidia’s sales.
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