S&P 500 hits a fresh record high on stronger economic growth, Nvidia pares losses
Investing.com -- Oppenheimer expects most major semiconductor companies to beat expectations this earnings season, driven by a sharp ramp-up in AI infrastructure investment and recovering demand in industrial and automotive markets.
Despite strong recent gains, SOX is up 13% year-to-date and 58% since April, Oppenheimer remains bullish, highlighting long-term structural growth.
It raised price targets for stocks like Nvidia (NASDAQ:NVDA) by $25 to $200. Broadcom (NASDAQ:AVGO) was raised to $305 from $265, and reiterated its preference for stocks with sustained exposure to AI and custom silicon.
Top picks include Nvidia, Broadcom, Marvell (NASDAQ:MRVL), and Monolithic Power Systems Inc (NASDAQ:MPWR).
The brokerage sees hyperscalers scaling up AI data centers at an unprecedented pace, deploying more than 1,000 Nvidia NVL72 racks each week in the second quarter.
Capital spending by the top four cloud providers is tracking over 40% higher year-over-year, fueling demand for GPUs, custom accelerators, and high-speed networking.
Data center AI remains the industry’s biggest growth driver. Nvidia’s Blackwell platform is ramping ahead of an expected GB300 launch in Q3, with Oppenheimer estimating more than 40,000 NVL72 racks to be deployed this year.
Custom AI chips from Broadcom, Marvell, and AMD (NASDAQ:AMD) are also gaining traction, while power and cooling demands continue to rise with racks nearing 1 megawatt.
Beyond AI, a cyclical recovery in autos and industrials is beginning to materialize. Semiconductor content per vehicle is growing more than 10% annually, with firms like NXP (NASDAQ:NXPI) and Texas Instruments (NASDAQ:TXN) positioned to benefit from rising demand in electric vehicles and ADAS.