TLDR
- JPMorgan selects Nvidia, Broadcom, and Micron as best semiconductor stocks for upcoming earnings season
- AI accelerator market growing at 50% annual rate with spending forecast to surpass $200 billion in 2025
- Nvidia holds 80-90% market share in AI accelerators with Q4 earnings report scheduled for February 25
- Broadcom’s AI chip sales increased 74% year-over-year with control of 55-60% custom chip market
- Micron stock climbed 40% year-to-date but supply only covers half to two-thirds of customer demand
Investment bank JPMorgan has announced its preferred chip stocks as companies prepare to report quarterly results. The firm expects strong performance to continue driving the semiconductor sector higher in 2026.
Five-star analyst Harlan Sur picked Nvidia, Broadcom, and Micron as his top three choices. JPMorgan also rates Marvell Technology, Analog Devices, KLA Corp, and Synopsys as overweight.
For smaller companies, the bank favors MACOM Technology Solutions and Astera Labs. Both firms should benefit from growing AI data center infrastructure spending.
Sur predicts most chip companies will deliver results matching or exceeding fourth-quarter forecasts. He expects companies to issue positive outlooks for Q1 and the full 2026 fiscal year.
The bank projects semiconductor industry revenue will increase more than 15% in 2026. AI accelerator spending should top $200 billion in 2025 while growing at a 50% annual pace.
These accelerator chips power servers, data centers, and cloud systems. They handle the heavy computational work required for artificial intelligence tasks.
Nvidia Leads AI Accelerator Sales
Nvidia commands 80-90% of the AI accelerator chip market. The company will release Q4 FY2026 financial results on February 25.
Large cloud computing providers generate consistent demand for Nvidia hardware. The firm’s CUDA software creates a sticky ecosystem that keeps buyers returning.
Production of Nvidia’s Blackwell platform continues ramping up. The upcoming Vera Rubin platform aims to slash AI processing expenses significantly.
Analysts give Nvidia a Strong Buy rating across Wall Street. Price targets imply around 43% potential gain from present values.
Broadcom Controls Custom AI Chip Segment
Broadcom announces Q1 FY26 earnings on February 26. The company makes specialized chips and networking equipment for massive AI installations.
Broadcom owns 55-60% of the market for custom-designed AI processors. CEO Hock Tan reported AI chip revenue grew 74% compared to last year and hit record levels.
Wall Street rates Broadcom as a Strong Buy stock. Analyst targets suggest approximately 41% upside opportunity.
Micron Faces Supply Shortage for AI Memory
Micron delivers Q2 FY26 earnings on April 1. The stock has gained 40% so far this year thanks to high-bandwidth memory demand.
Current production meets only 50-67% of what key customers require. This shortfall demonstrates the extreme need for memory chips in AI workloads.
Analysts assign Micron a Strong Buy rating overall. The consensus target price of $374.35 shows about 6% downside risk following the strong recent run.
JPMorgan warned that climbing memory costs might dampen PC and smartphone purchases in late 2026. Still, the bank maintains confidence in AI-driven chip demand trends.
Semiconductor stocks advanced Wednesday following JPMorgan’s report. Nvidia and Broadcom posted the largest gains among highlighted companies.
The firm expects earnings season to bring upward revisions to analyst estimates. This pattern should support continued stock price appreciation through the remainder of 2026.
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