TLDR
- JPMorgan recommends Nvidia, Broadcom, and Micron as top AI chip investments before Q4 earnings reports
- Semiconductor sector revenue projected to rise over 15% in 2026 driven by AI infrastructure spending
- Nvidia commands 80-90% of AI accelerator market with February 25 earnings date set
- Broadcom reports 74% year-over-year AI chip revenue growth with 55-60% share of custom chip segment
- Micron shares up 40% this year as high-bandwidth memory demand exceeds supply capacity by 33-50%
JPMorgan has published its preferred semiconductor investments as fourth-quarter earnings reports begin. The financial institution forecasts continued strength in chip stocks through 2026.
Analyst Harlan Sur identified Nvidia, Broadcom, and Micron as his primary recommendations. The bank holds overweight positions on these three plus Marvell Technology, Analog Devices, KLA Corp, and Synopsys.
JPMorgan also highlighted smaller firms MACOM Technology Solutions and Astera Labs. These companies are positioned to capitalize on expanding AI data center construction.
Sur expects chip manufacturers to report results that meet or exceed Q4 projections. He anticipates companies will provide upbeat forecasts for the first quarter and full year ahead.
The bank estimates semiconductor industry sales could grow more than 15% this year. AI accelerator chip spending is on track to reach over $200 billion in 2025 with 50% compound annual growth.
AI accelerators are purpose-built processors for servers, data centers, and cloud infrastructure. These chips handle the intense calculations needed for machine learning and AI operations.
Nvidia Maintains Market Leadership Position
Nvidia controls 80-90% of the AI accelerator chip space. The company releases Q4 FY2026 earnings on February 25.
Top cloud service providers fuel steady demand for Nvidia’s products. The CUDA software platform creates an integrated environment that encourages customer retention.
Nvidia is expanding production of its Blackwell architecture. The next Vera Rubin platform promises to lower AI computing costs when it arrives.
Wall Street consensus rates Nvidia as a Strong Buy. Analyst price targets point to roughly 43% upside from current prices.
Broadcom Captures Custom Chip Market
Broadcom reports Q1 FY26 results on February 26. The company manufactures tailored processors and networking components for enterprise AI systems.
Broadcom holds 55-60% of the custom AI chip market segment. CEO Hock Tan noted AI chip sales jumped 74% versus the prior year and reached all-time highs.
Analysts rate Broadcom as a Strong Buy. Price targets indicate approximately 41% growth potential.
Micron Benefits from Memory Chip Shortage
Micron announces Q2 FY26 earnings on April 1. The stock has rallied 40% year-to-date on robust high-bandwidth memory orders.
Production currently fulfills just 50-67% of what major clients request. This supply gap reflects the intense requirements for memory in AI computing environments.
Micron receives a Strong Buy rating from the analyst community. The average target of $374.35 suggests about 6% downside after the recent price surge.
JPMorgan noted that higher memory prices may weaken PC and smartphone demand in the second half of 2026. However, the firm remains bullish on AI-related chip consumption.
Chip stocks rose Wednesday after JPMorgan released its assessment. Nvidia and Broadcom led gains among the recommended securities.
Sur believes earnings season will trigger upward estimate revisions across the sector. This dynamic should fuel additional stock gains throughout the year.
