By Nauman Khan
Publication Date: 2026-01-21 19:25:00
This article first appeared on GuruFocus.
Shares of several U.S. semiconductor companies moved higher Wednesday, led by Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO), as JPMorgan highlighted its preferred chip stocks ahead of the upcoming earnings season.
The firm said it expects most semiconductor companies to post results that are in line with, or slightly better than, expectations for the fourth quarter, while offering steady outlooks for early 2026, according to a Tuesday note.
JPMorgan holds Overweight ratings on Broadcom, Nvidia, Micron (NASDAQ:MU), Analog Devices (NASDAQ:ADI), Marvell Technology (NASDAQ:MRVL), KLA Corp. (KLAC) and Synopsys (NASDAQ:SNPS). It also pointed to Macom Technology Solutions (NASDAQ:MTSI) and Astera Labs (NASDAQ:ALAB) as favored smaller-cap names.
The analysts see room for further growth in artificial intelligence-related chips, estimating that spending on AI accelerators could continue expanding at a strong pace after reaching roughly $200 billion in 2025.
They also expect increased investment across memory, networking, semiconductor equipment and electronic design automation, as demand from cyclical end markets shows signs of stabilizing.
The firm estimates industry revenue could rise more than 15% this year, though higher memory prices may weigh on some consumer electronics demand later in the year.
