2024.04.02 11:42
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Bank of America: Don't just focus on NVIDIA when it comes to chip stocks, there are three other companies worth considering as well

Bank of America refers to Micron Technology, Intel, and AMD as the "new three warriors" in the AI chip field, stating that they are expected to dominate "profitable niche markets"

Author: Li Xiaoyin

Source: Hard AI

AI chip newcomers are catching up.

In a recent report, Bank of America analyst Vivek Arya pointed out that while NVIDIA and Broadcom are currently the two leaders in the AI chip field, Marvell Technology (stock code: MRVL), Micron Technology (stock code: MU), and AMD (stock code: AMD) also have great potential in this area and are expected to capture "profitable niche markets."

Arya refers to these three companies as the "new three musketeers" in the AI chip field, all of which have been given a "buy" rating.

The report states that Marvell Technology has significant opportunities in the optoelectronics and Application-Specific Integrated Circuit (ASIC) fields. Previously, Marvell Technology has indicated the potential to win over 10% of the custom AI chip market share and dominate the optoelectronics product market.

Arya believes that Marvell Technology ranks second in the AI network chip field after Broadcom and is expected to experience a stock price surge following the industry analysis day on April 11. However, due to the company's "unstable performance over the past few quarters," Marvell Technology's traditional business may face a downturn in the short term.

Micron Technology is favored by Arya for its prospects in high-bandwidth memory (HBM) products. Arya stated that with the rise and development of edge AI, Micron Technology is poised to be a winner.

Arya mentioned in the report:

"HBM may be the first memory technology to rapidly eat into the supply, as it consumes three times the number of wafers compared to traditional DRAM memory."

Regarding AMD, Arya does not believe, as widely expected, that the company will capture a 20% share in the AI server market, but he still sees a bright future for AMD in the chip market.

Arya pointed out that with the rapid rise in the AI market and the company's consistent execution capabilities, AMD is expected to hold a 5-10% share in the AI accelerator market.

While the report is optimistic about the "new three musketeers," it also warns that their stock prices may have a valuation premium compared to the "leaders" in their respective fields, which could lead to significant price fluctuations in the future