US semiconductor companies are on track for faster AI-driven sales growth and stronger returns this year as spending on AI infrastructure accelerates, BofA Securities said Wednesday in a report.
BofA raised its 2030 estimate for the AI data-center systems market to $1.7 trillion from $1.4 trillion, reflecting a stronger outlook for AI-related capital spending.
Despite investor concerns about whether elevated capital expenditures can last, BofA said the near term still looks constructive as companies such as OpenAI and Anthropic, along with expected IPO activity, support a healthier demand backdrop.
The sector may also see efficiency gains in 2027 as new compute and memory architectures roll out, the report said.
Memory demand is expected to continue outpacing supply as AI projects scale up, with pricing likely to remain firm, the report said. BofA lifted Micron Technology's (MU) price target to $950 from $500, citing a "much stronger midterm pricing outlook."
For top pick Nvidia (NVDA), BofA raised its price target to $320 from $300, pointing to upcoming catalysts including earnings, the Computex trade show and a potential new CPU launch.
BofA increased Marvell Technology's (MRVL) price target to $200 from $125, citing strong optics demand tied to AI buildouts and momentum in custom silicon.
The firm raised Advanced Micro Devices' (AMD) price target to $500 from $450, citing recent CPU strength and potential catalysts at the company's July analyst day, along with more data-center opportunities.
For Broadcom (AVGO), BofA said recent frame contracts with Alphabet's (GOOGL) Google and Meta Platforms (META) help lock in 2027 demand, with potential upside to the consensus estimate of $110 billion in AI sales.
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