AI-themed stocks have recently faced volatility, but Wall Street analysts remain bullish on semiconductor stocks heading into 2026. Bank of America analysts emphasized in a recent report that AI remains a "hot sector," with chip stocks being one of the best ways to capitalize on the AI boom. They project sales growth as cloud computing giants continue investing in data center hardware. Despite recent pullbacks in tech stocks, major AI-focused equities have significantly outperformed the S&P 500 this year.
Jefferies analysts echoed this sentiment, stating they will "continue investing in AI through 2026." While concerns over an AI bubble have pressured the tech sector recently, both Jefferies and Bank of America suggest this year’s top performers will remain winners next year. NVIDIA, the AI chip leader, has seen its stock dip over 12% from its October peak but still boasts a year-to-date gain exceeding 30%, driven by record demand for its advanced chips.
Bank of America expects NVIDIA to sustain strong growth in 2026, backed by a steady pipeline of new products. The bank lists NVIDIA as its top large-cap pick, alongside Broadcom (a custom AI chipmaker), Lam Research, KLA, Analog Devices, and Cadence Design Systems. Similarly, Jefferies highlighted NVIDIA, Broadcom, Lam Research, KLA, Applied Materials, and Camtek as key recommendations.
Jefferies noted that while NVIDIA remains a core holding, Broadcom may offer greater upside due to its growing custom chip business, particularly after Google began selling its custom chips to third parties like Meta and Anthropic. Morgan Stanley also reinforced the bullish outlook, citing unprecedented AI infrastructure spending and strong inventory normalization in traditional analog/MCU chips. The firm named NVIDIA, Broadcom, and Astera Labs as its top three chip picks for 2026, further underscoring the sector’s consensus appeal.
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