hapabapa
The theme of generative artificial intelligence has been dominated by a few companies, especially Nvidia (NVDA), but it looks to be broadening out, research firm TD Cowen said.
“NVIDIA continues to dominate trading, narrative, and fundamentals, though GenAI spending is beginning to expand to others such as AMD, Broadcom (NASDAQ:AVGO) and Marvell (NASDAQ:MRVL) (a dynamic that will accelerate in C2H24),” analysts at the firm wrote in an investor note.
The analysts added that there are “no signs” of generative AI demand abating in the near term, pointing out that Broadcom recently raised its AI target for the full year. Additionally, major software companies are still rolling out AI-based products, so it’s likely that demand will continue to strength as the big spenders try to achieve the convergence of general artificial intelligence.
The firm raised its price targets on AMD, Credo Technology, Cirrus Logic, Monolithic Power Systems, MACOM Technology Solutions (MTSI) and Nvidia.
Delving a bit deeper, the analysts expect that the MI300X accelerator program (and its successors) could help AMD generate $4.75B in sales in 2024 and $9.5B in 2025. Meanwhile, Broadcom is seen as “exceptionally well-positioned to benefit from the ongoing transition to Ethernet back-end networking in addition to custom silicon ramping.”
Marvell should benefit as the attachment rate on opto-electronics rises and its custom silicon business continues to see growth.
Monolithic Power should also benefit from strong attach rates and an increase in content at Nvidia, AMD and its power management business for tensor processing units, specifically at Google (GOOG) (GOOGL), which is a Broadcom client.
Credo Technology (CRDO) is also an expected beneficiary in the small and mid-cap space, as is Qualcomm (QCOM), which the firm said is “poised to benefit from expansion of AI spend beyond datacenter towards client devices including smartphone and PCs.”