Broadcom, Nvidia are Bernstein’s top chip stocks for 2025; firm sticks with Qualcomm

Like Bank of America, investment firm Bernstein counts Broadcom (NASDAQ:AVGO) and Nvidia (NASDAQ:NVDA) among its top stocks in the semiconductor space for next year. Unlike Bank of America, the firm is sticking with a call that did not work out as planned – Qualcomm (NASDAQ:QCOM).

Broadcom could be experiencing its own “Nvidia moment” as AI application specific integrated circuits and networking ramp “amid a reset core business and VMware accretion,” analyst Stacy Rasgon wrote in a note to clients. And Nvidia is front and center, with its Blackwell line of GPUs in full scale production.

However, Qualcomm has been a bit tricky, as Rasgon believed the smartphone industry was bottoming out and he liked its product portfolio. And while the stock has underperformed its peers and the S&P 500 year-to-date, he is sticking with it for several reasons.

“Edge AI a positive from a content point of view, the adjacency story is genuine and option value exists around PCs with the analyst day pointing to a plausible $50B in sales and $13-$15 in EPS by 2029,” he wrote in a note to clients. “We understand the Apple (AAPL) overhang needs to resolve (we have it coming out and wish the Street would follow suit) but at current valuations we feel OK to wait.”

He has an Outperform rating and $215 price target on Qualcomm.

Elsewhere

Rasgon also opined on other parts of the semiconductor space, and said he is “lukewarm” on the analog portion of the market, amid fears of cracks in the automotive space and a “double dip” decline in industrials. As such, Analog Devices (ADI) and Texas Instruments (TXN) remain “quite expensive,” while NXP Semiconductors (NXPI) is cheaper, but has more exposure to the automotive space.

In the semiconductor equipment space, Rasgon said he prefers Applied Materials (AMAT) over Lam Research (LRCX), citing its revenue mix, the fact that China has been “de-risked” and it is less dependent on NAND.

And lastly, while AMD’s (AMD) AI story is “real,” it’s still small in the context of the broader market, and it’s “unlikely” there will be any upside to investor expectations, Rasgon said. He has a Market Perform rating and $150 price target on AMD.