Semiconductor Rebound Wall Street Picks... Top 3 Most Preferred Stocks Are 'These'

NVIDIA, Broadcom, and KLA Stock Price Uptrend Forecast
Semiconductor Sector Shows Improved Performance in Q4 and Q1 Related Stocks

Wall Street has projected that the stock prices of Nvidia, Broadcom, and KLA could rise in the upcoming fourth quarter.

Vivek Arya, an analyst at Bank of America (BoA), stated in a client memo on the 12th (local time) that "the semiconductor sector typically improves in stock performance after the seasonal downturn, during the fourth quarter and the first quarter of the following year," and analyzed that these three companies can achieve high profitability in their core markets.

Arya also emphasized that the recent decline in semiconductor-related stocks does not indicate the end of the industry cycle. He analyzed, "The semiconductor upcycle has lasted for four quarters so far, during which the Philadelphia Semiconductor Index rose by 28%." He added, "Historically, such cycles have lasted an average of 10 quarters, with the index increasing by 67%."

Nvidia, which controls over 80% of the artificial intelligence (AI) chip market, has seen its stock price surge 126% year-to-date. During the same period, communication semiconductor company Broadcom rose 36%, and semiconductor equipment maker KLA increased by 35%. However, concerns have been raised that investments by big tech companies are excessive relative to AI profitability, leading to a sharp recent decline in semiconductor sector stocks.

Regarding this, Arya stated, "It is still too early to determine whether AI is a bubble," and dismissed such concerns by noting that "the adoption of AI by companies and countries remains in its early stages." He also mentioned that Nvidia's new Blackwell chip, optimized for AI operations, has not yet begun shipping.

With the market closely watching Nvidia's earnings report on the 28th, Arya emphasized a cautious investment approach, noting that "September traditionally sees weak performance in the Philadelphia Semiconductor Index, so patience will be necessary." He also introduced companies such as Edwards Design Systems and Synopsys as firms that could shine during the semiconductor downturn.