Nvidia and 2 Other Chip Stocks to Play AI Into Earnings, Says J.P. Morgan

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Robust demand for artificial-intelligence chips makes for attractive buying opportunities in several semiconductor stocks headed into earnings season, according to J.P. Morgan.

“AI/accelerated compute demand remains strong,” analyst Harlan Sur wrote on Friday. Some AI-related stocks are “best positioned to weather a potential trade/tariff challenging macro environment.”

Sur said his top chip-stock ideas are Nvidia, Broadcom, and Marvell Technology. He has an Overweight rating on all three.

In early trading Friday, Nvidia shares were down 0.4%, and Broadcom stock was down 1.3%, while Marvell stock was up 1.2%.

The analyst wrote that AI-computing infrastructure requires high-speed networking capabilities, which benefit Broadcom for switching products and Marvell for optical connectivity solutions. He notes Nvidia is the leader of “off-the-shelf” AI hardware for large data centers.

“We continue to anticipate AI being one of the fastest-growing silicon opportunities in all of semiconductors,” Sur wrote. “AI/Deep Learning investments should continue growing strongly through the next several years and beyond and proliferate into enterprise and edge applications.”

On Thursday, Taiwan Semiconductor Manufacturing management said the AI secular growth trend continues to be strong and the company has not seen any changes in customer behavior for the second half of this year.

Write to Tae Kim at tae.kim@barrons.com