Bernstein analysts remain bearish on the semiconductor industry, predicting a return to growth in 2024 driven by memory innovation, improved PC and smartphone markets, and excitement around Artificial Intelligence (AI).
“Our top picks remain AVGO and NVDA,” Bernstein notes. While acknowledging cyclical weakness in Broadcom’s (NASDAQ: ) core business, Bernstein highlights a “strong AI story” and potential upside from the VMware acquisition. Analysts believe NVIDIA (NASDAQ: ) “remains the best AI play.”
Qualcomm ( QCOM ) also gets a positive nod, with Bernstein noting an increasing focus on its AI capabilities within the returning smartphone market. The report finds that “QCOM’s product portfolio is as good as it’s ever been” and sees the stock as attractively priced.
Bernstein expresses a more cautious view on analog chipmakers such as Analog Devices ( ADI ), Texas Instruments ( TXN ), and NXP Semiconductors ( NXPI ) due to concerns about price recovery and expensive valuations.
Analysts maintained their Market Performance estimates for Small Advanced Devices and Intel, noting AMD’s strength but pointing to a modest increase in current investor expectations.
