Nvidia (NVDA), Broadcom (AVGO) and Lam Research (LRCX) are among Bank of America’s top semiconductor stocks to own for 2026, amid the belief that the artificial intelligence spending boom still has a long runway.
“We see 2026 as [the] mid-point of an 8-10 year journey of upgrading traditional IT infra for accelerated and AI workloads,” analysts at the firm wrote in a note to clients. “Greater scrutiny of AI returns and hyperscaler cash flows could keep stocks choppy, offset by newer/faster LLM builders and AI factories serving enterprise and sovereign customers. We forecast 2026 to feature another ~30% growth towards the first $1T for semiconductor sales, supported by nearly double-digit YoY wafer fab equipment (WFE) sales growth.”
Aside from the aforementioned trio, Bank of America favors KLA Corp. (KLAC), Analog Devices (ADI) and Cadence Design Systems (CDNS) among large-cap companies and Credo Technologies (CRDO), MKS (MKSI), Macom Technology Solutions (MTSI), Teradyne (TER) and Advanced Energy Industries (AEIS) among small and medium-cap companies.
Delving deeper, the firm said the AI race is still in the “early/mid-stages,” and investors should be focusing on sector leaders, despite the recent choppiness seen in stocks like Nvidia, Broadcom and others.
The firm is forecasting another year of 50% or more year-over-year growth in AI semiconductors, aided by “strong data center utilization, tight supply, enterprise adoption and race between LLM-builders, hyperscale and sovereign customers.” There are a number of catalysts for the industry leader Nvidia ahead, including the Consumer Electronics Show and GTC events in the first-quarter. The firm also likes AMD (AMD) among AI-centric chip stocks.
Regarding the analog space, Bank of America analysts said investors should “stay selective,” as it is unconvinced about a turnaround. “Lukewarm macro conditions (industrial PMI <50), declining car production, rising China competition and sluggish consumer demand keep analog investing tough,” the analysts added.
Other emerging themes for 2026 include co-packaged optics, robotics and quantum, with companies such as Lumentum (LITE) and Coherent (COHR) seen as leaders in co-packaged optics. The White House’s focus on robotics in 2026 should benefit Teradyne, the analysts added. Lastly, quantum is still seen as an “emerging opportunity,” albeit one with long-term implications.