Analysts highlight strong AI demand and analog sector recovery as key drivers for semiconductor stocks.
BMO Capital initiated coverage on 12 semiconductor and quantum computing stocks, assigning Outperform ratings to 10, including Nvidia (NVDA) and Micron (MU). The remaining two received Market Perform ratings. The move reflects optimism about AI-driven demand and an early-cycle recovery in analog companies.
The firm identified Nvidia as its top AI pick, alongside Broadcom, AMD, Marvell, and Semtech. Preferred analog names include Analog Devices, Impinj, and Microchip Technology. D-Wave Quantum (QBTS) was also viewed favorably for its quantum computing potential. AI demand is fueled by data center investments, while analog recovery is supported by industrial and auto sectors.
The outlook underscores growing confidence in semiconductor stocks amid improving macroeconomic conditions and sector-specific tailwinds.