TD Cowen: AI Dominance Not Just NVIDIA, AMD, Broadcom and Other Companies Will Face Growth Opportunities
The theme of Generative Artificial Intelligence (GenAI) has been dominated by a few giants, especially NVIDIA. However, research firm TD Cowen stated that now other companies such as AMD, Broadcom, etc., are also expanding their GenAI spending. Analysts predict that AMD will generate substantial sales in 2024 and 2025. Broadcom, on the other hand, is in a favorable position to benefit from the transition to Ethernet backend networks. Meanwhile, Marvell and Monolithic Power Systems will also benefit from the increasing attachment rate of optoelectronic products and the growth of custom silicon businesses. Overall, there is no sign of decreasing demand for artificial intelligence, with large software companies still launching AI-based products, and demand may continue to strengthen
According to the Zhītōng Finance and Economics APP, research firm TD Cowen stated that the theme of Generative Artificial Intelligence (GenAI) has been dominated by a few giants, especially NVIDIA (NVDA.US), but this team seems to be expanding.
Analysts at the company wrote in an investor report, "NVIDIA continues to dominate in trading, narrative, and fundamentals, although GenAI spending by other companies such as AMD (AMD.US), Broadcom (AVGO.US), and Marvell (MRVL.US) is also starting to expand."
The analysts added that there are "no signs" of a decrease in artificial intelligence demand in the short term, and pointed out that Broadcom recently raised its annual artificial intelligence target. In addition, large software companies are still launching AI-based products, and as major customers attempt to achieve the integration of general artificial intelligence, demand may continue to strengthen.
The company raised the target prices for AMD, Credo Technology, Cirrus Logic, Monolithic Power Systems, MACOM Technology Solutions (MTSI.US), and NVIDIA.
Further research suggests that the MI300X accelerator program (and its follow-up products) is expected to help AMD generate sales of $4.75 billion and $9.5 billion in 2024 and 2025, respectively. Meanwhile, Broadcom is believed to be "well positioned to benefit not only from custom chips but also from the ongoing transition to Ethernet back-end networks."
With the increasing attachment rate of optoelectronic products and the continued growth of its custom silicon business, Marvell will benefit from this trend.
Additionally, Monolithic Power (MPWR.US) will also benefit from the high attachment rates and content growth of NVIDIA, AMD, and their Tensor Processing Unit (TPU) power management businesses (especially Broadcom's customer Google).
Credo Technology (CRDO.US) and Qualcomm (QCOM.US) are also expected beneficiaries in the mid-cap sector, with the company stating that these companies "will benefit from the expansion of AI spending from data centers to client devices such as smartphones and personal computers."