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Benzinga
Benzinga
Business
Anusuya Lahiri

BofA Picks Nvidia As Top Pick; Expresses Bullishness On Marvell, AMD, ON Semiconductor

  • BofA analyst Vivek Arya believes chipmaker Nvidia Corp (NASDAQ:NVDA) could benefit from growth in several areas.
  • Arya chose Nvidia as his top large-cap sector pick.
  • Nvidia and fellow semiconductor businesses Marvell Technology, Inc (NASDAQ:MRVL) and Advanced Micro Devices, Inc (NASDAQ:AMD), can all immensely benefit from the continued growth in cloud computing, among other factors, Arya said.
  • Arya also chose ON Semiconductor Corp (NASDAQ:ON) as his top small- to mid-cap pick, saying the company would benefit from its automotive technology.
  • Previously semiconductor companies had fewer drivers than now, such as computers and smartphones. 
  • However, presently, there are multiple end markets served by a consolidated set of chip vendors, delivering proprietary products and generating solid free cash flow margins.
  • Arya's top picks serve end markets where he expects spending/content growth drivers to be most resilient, such as cloud computing/AI, high-end industrial, EV/advanced driver assist systems and rising chip complexity.
  • Semis look compelling on a relative basis vs. industrial/Infotech stocks in the S&P 500 index with catalysts like easing of China lockdowns could help re-energize investor interest back in the sector.
  • Price Action: NVDA shares traded lower by 1.63% at $183.68 on the last check Wednesday.
  • Photo via Wikimedia Commons
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