Can Semis Continue to Shine Amid AI Boom? What Management Teams Say

Forward GuidanceIt’s no secret that CEOs, especially public company CEOs, have “a horse in the race” regarding their rhetoric on earnings calls about their underlying companies’ financial health and future growth prospects. While a CEO must tell the truth to Wall Street, management teams will often put a positive spin on what lies ahead.“Once is happenstance, twice is a coincidence, three times is a pattern.” ~ Ian FlemmingNevertheless, savvy investors understand that though they should sometimes take bias-driven statements with a grain of salt, no one has greater visibility than insiders. Better yet, investors can gain a fair amount of conviction if several CEOs in an industry make similar statements.Semis StandoutOne industry with an obvious positive trend is the semiconductor/artificial intelligence (AI) space.Broadcom Smashes EarningsBroadcom (AVGO) is a top semiconductor and software developer for AI applications used in data centers. After the market closed Thursday, AVGO gained over 14% to print fresh all-time highs. In the earnings call, Broadcom CEO Hock Tan revealed that “Three hyperscalers are planning to deploy 1 million XPU clusters across a single fabric by 2027, representing a $60-90 billion opportunity in FY27 alone.”AMD Touts AI Prospects at Barclays ConferenceAdvanced Micro Devices (AMD) is a leading semiconductor manufacturer for AI applications. Presenting a technology conference, management said they are seeing “Significant in Generative AI and believe we are in a super compute investment cycle, which will drive accelerated market expansion.”Marvell Spikes After CFO CommentsMarvell (MRVL) is another semiconductor that is benefitting from the AI buildout. Last week, shares soared 23% on massive volume turnover after reporting earnings. On the conference call, the Marvell CEO said, “Marvell’s data center end market has grown to account for 73% of our consolidated revenue in the third quarter, driven by AI, and we expect this percentage to increase again in the fourth quarter.”Nvidia Sees Insane DemandNo better AI bellwether exists than Nvidia (NVDA). Weeks ago, CEO Jensen Huang gushed that the company is experiencing “Insane demand” for its latest chip, dubbed Blackwell.Astera Labs: A New AI LeaderThe bullish theme is not only occurring in legacy semiconductor stocks like the ones mentioned above. Astera Labs (ALAB), a semiconductor solution provider for AI infrastructure, announced quarterly earnings that exploded by more than 200%. In the EPS call, CEO Jitendra Mohan enthusiastically said, “Our business has entered a new growth phase with multiple product families ramping across AI platforms, featuring both third-party GPUs and internally developed AI accelerators, which drove the Q3 sales upside versus our guidance.”ConclusionIt’s imperative that investors monitor industry themes and earnings calls to gauge an industry’s prospects. Several CEOs in the semiconductor industry echo the notion that growth will remain solid, driven primarily by the AI boom.   Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Astera Labs, Inc. (ALAB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks