By Brian Sozzi
Publication Date: 2026-09-30 19:39:00
We are down to three months left in the year, and on Wall Street, that means the start of year-ahead predictions for the economy, stocks, and sectors.
It’s not unusual for analysts’ big calls to drive the stocks they call out, especially if the calls are assigned to price targets and earnings estimate lifts.
Here’s one of the first worthwhile look-ahead calls to hit our inbox, from BofA semiconductor analyst Vivek Arya on momentum tech stocks of companies at the center of the AI boom.
Arya pointed out the strong potential for AI capital expenditures to come in ahead of many estimates and be a better-than-expected tailwind for a host of stocks.
The call
On the outlook for AI infrastructure, Arya said, “We raise our CY26-30 estimate AI data center systems addressable market to $2.2 trillion at a +40% annual pace from $1.8 trillion/+33% prior. The virtuous flywheel of agentic tool adoption by consumers and enterprises, competition between public and private AI labs, and limited chip supply will likely keep AI spending robust for the next several years. Any pacing or addition of safety guardrails to frontier models is likely to increase not reduce compute requirements and shift more demand to faster growing inference from training. Meanwhile, valuations for top chip stocks remain compelling relative to their projected EPS growth, with SOX trading at a 21x forward PE, 12% below its 24x median multiple since the…
