Nvidia (NVDA), Broadcom (AVGO) and Astera Labs (ALAB) are among Morgan Stanley’s top semiconductor stocks for 2026, the firm said in a research note.
“For the third consecutive year, the biggest debate is AI semis, where the index weighting is dominated by the processor names, and the (so far) insatiable appetite for compute is the most important variable to consider,” analysts at the firm wrote in a note to clients. “We have some skepticism on the 5-year views that make 2025 strength look like a rounding error, where industry participants plan to spend multiples of their private market value on data center compute. We might not be right, as the market cap is evolving, but we do expect there to be digestion cycles on the way, even if the longer term outlook is the correct one.”
Nvidia and Broadcom are the firm’s two preferred names in the processor market. “As we write this, there is growing enthusiasm for ASIC, where growth will be strong, but as various bottlenecks emerge we continue to think that NVIDIA will be the highest ROI solution in cloud, particularly as Vera Rubin ramps in 2h26,” the analysts explained. “While there is limited leverage, we continue to think the market is underestimating NVIDIA’s position.”
The firm also has Equal-Weight ratings on AMD (AMD) and Marvell (MRVL), as both offer the potential for “material upside,” but there is also uncertainty. The firm is more cautious on Intel (INTC), given its cynical stance on Intel’s foundry operations. Astera Labs is the firm’s favorite small cap pick in the data center space.
Memory, chip equipment and more
In the memory and semiconductor equipment space, Morgan Stanley said the ramp up in AI is likely to keep memory and logic wafer supplies tight. As such, Micron (MU) is the firm’s top pick in the memory market, though it also has an Overweight rating on Sandisk (SNDK).
In the chip equipment space, Applied Materials (AMAT) and Taiwan Semiconductor (TSM) are the two stocks that Morgan Stanley is most constructive on.
Lastly, the story in the analog portion of the market is much the same as it was in 2025 — improving, albeit slowly. As such, it likes NXP Semiconductors (NXPI), given it is “the best combination of growth and value,” while Analog Devices (ADI) is more expensive, though it has “strong growth potential.”