) and other AI-focused chip companies. Amid this surge, Bank of America has reaffirmed its confidence in the prospects of Nvidia and another AI chip stock, underscoring their status as top picks.The surge in AI chip stocks has been driven by several compelling factors. Over the last 12 months, the SOX ETF witnessed a 57.75% increase, underscoring the red-hot nature of the semiconductor industry, particularly for the names benefitting from the artificial intelligence surge.
“We don't believe AMD will have an adverse impact on Nvidia’s momentum as the TAM is larger and Nvidia is the industry’s driving force,” said the firm. “Nvidia continues to do AMD and everyone else a favor by expanding the market and driving awareness.” The proliferation of AI applications, coupled with the unprecedented growth potential, has bolstered investor confidence in chip stocks, contributing to their impressive rally in recent times.) are their top picks in the US semiconductor space, noting that the adoption of accelerated/AI servers is a generational shift with NVDA and AVGO the leaders.
They added: “Each “junior samurAI” trades interestingly at a valuation premium to its respective leader, so greater stock volatility is to be expected. However, as the leader expands the market TAM, the junior can likely continue to carve a profitable niche.”Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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