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The Rising Demand for Artificial-Intelligence Semiconductors


The demand for artificial-intelligence (AI) semiconductors is predicted to have a significant impact on the fortunes of several chip stocks this year, according to Oppenheimer. Analyst Rick Schafer has reaffirmed his Outperform ratings for four key players in the industry: Nvidia, Marvell Technology, Monolithic Power Systems, and Broadcom. With their impressive price targets, these stocks are positioned as top picks for 2024 – a testament to the growth potential of AI-related technologies.

Nvidia: Leading the AI Revolution Nvidia stands out as the dominant player in the AI space, leveraging its robust hardware/software installed base. Schafer believes that Nvidia is the top choice for investors looking to capitalize on the AI wave. The company’s next-generation AI chip, called the B100, is expected to be released in the third quarter. Additionally, Nvidia’s programming platform, CUDA, offers a comprehensive suite of AI-related tools that make application development more accessible – a critical factor that has attracted both start-ups and corporations alike.

Monolithic Power Systems: Powering AI Servers Monolithic Power Systems is well-positioned to benefit from the increasing demand for AI servers that integrate its power-management chips. As companies continue to embrace AI technologies, the need for efficient and reliable servers becomes paramount. Monolithic Power Systems aims to meet this demand head-on.

Marvell Technology and Broadcom: High-Speed Networking Solutions Marvell Technology and Broadcom are poised for success with their high-speed networking solutions. As the demand for AI intensifies, so does the need for fast and reliable networks. Schafer believes that both Marvell and Broadcom have the right products and expertise to thrive in this dynamic market.

Outlook for the PC and Smartphone Markets While the outlook remains positive for AI-related semiconductor stocks, Schafer is less optimistic about the PC and smartphone markets in 2024. He does not expect AI to drive a significant demand uptick or refresh for computers. This assessment suggests that AI’s impact may be more concentrated in specific sectors rather than across the board.

The strong momentum behind artificial-intelligence semiconductors is undeniable, and investors are taking notice. As companies strive to monetize their AI strategies, these chip stocks are poised to benefit from this lucrative market. With Nvidia leading the charge, supported by Monolithic Power Systems, Marvell Technology, and Broadcom, the future looks promising for the AI semiconductor industry.

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