Brokerage says there is little threat to Nvidia’s dominance and the market has priced in the view that cloud firms would gradually reduce their chip purchases.
- RBC Capital Markets initiated coverage on the semiconductor sector.
- It placed a ‘Sector Perform’ rating on most legacy chipmakers, including Intel and AMD, citing limited near-term catalysts.
- Brokerage sees substantial upside in Arm, Marvell, and Astera Labs stocks.
RBC Capital Markets initiated coverage of semiconductor stocks, issuing bullish recommendations for sector leader Nvidia, memory chipmaker Micron, as well as fab equipment makers ASML and Lam Research.
The brokerage shared steep stock forecasts for Arm, Astera Labs, and Marvell. It, however, expects limited upside for legacy chipmakers like Intel, AMD, Broadcom, and Qualcomm.
In a research note, RBC said its analysis shows continued momentum for Nvidia, despite concerns that Big Tech firms might slow the pace of their chip orders. It noted that the memory chip shortage could be a tailwind for Micron, but likely less so for SanDisk, whose shares have already surged roughly tenfold since it began trading independently in February last year.
Here’s the full list of RBC’s latest predictions on key chip stocks:
| Company< | Rating< | Price Target < | Implied Upside< | Notes< |
| Nvidia | Outperform | $240 | 31.2% | Unrivalled dominance; Hyperscaler capex spending slowdown to be gradual, and current price reflects a potential slowdown |
| Intel | Sector Perform | $50 | 2.7% | Business performance has improved but higher memory prices and supply constraints could impact near term revenue and margin |
| AMD | Sector Perform | $230 | 2.9% | Price reflects OpenAI deal gains, and potential revenue acceleration; no catalysts on the horizon |
| Broadcom | Sector Perform | $370 | 8.9% | Gain potential from Anthropic and OpenAI deals is unclear |
| Micron | Outperform | $425 | 27.4% | Memory-chip supply (DRAM) to remain tight through 2027, which could drive strong profits and revenue gains |
| SanDisk | Sector Perform | $400 | 3.1% | Upside from NAND cycle and AI capabilities |
| Marvell | Outperform | $105 | 29.2% | Optimism around Amazon’s Trainium chips, co-developed with Marvell |
| Astera Labs | Outperform | $225 | 30.7% | UALink opportunity, plus boost from Nvidia’s H200 sales in China |
| Arm | Outperform | $140 | 33.3% | Upside from CSS adoption and data center segment growth |
| Lattice Semiconductor | Outperform | $105 | 23.1% | Upside from communications segment growth |
| Qualcomm | Sector Perform | $180 | 9.4% | No major catalysts in horizon |
| ASML | Outperform | $1,550 | 22.7% | Wafer Fab Equipment demand remains healthy |
| Skyworks | Sector Perform | $65 | 8.6% | Fundamentals stable, with potential upside from the Qorvo acquisition |
| Lam Research | Outperform | $260 | 24.5% | Wafer Fab Equipment demand remains healthy |
| Silicon Labs | Sector Perform | $160 | 7.4% | Progress in the WiFi segment could prompt a rating upgrade |
| KLA Corp | Sector Perform | $1,550 | 8.1% | Wafer Fab Equipment demand remains healthy |
Source: The Fly<
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