Nvidia (NVDA), Broadcom (AVGO), and Micron (MU) are among J.P. Morgan’s favorite semiconductor stocks going into earnings season.
“We head into 4Q25 earnings season (and 2026 more broadly) with the expectation that companies will deliver in-line/better 4Q results while providing constructive commentary on the outlook for 1Q and CY26, spurring a continuation of the trend of positive earnings revisions that we have witnessed in recent quarters, which in turn we think will provide support for stocks to continue to outperform through the end of this year,” analysts led by Harlan Sur wrote in a note to clients.
The firm has Overweight ratings on Broadcom, Marvell (MRVL), Nvidia, Analog Devices (ADI), Micron, KLA Corp. (KLAC) and Synopsys (SNPS). It also said it likes Macom Technology Solutions (MTSI) and Astera Labs (ALAB) in the small-cap portion of the sector.
Delving a bit deeper, the analysts weighed in on various parts of the semiconductor market and said they believe there is “considerable upside” to the AI accelerator total addressable market. They see 50% compound annual growth rates for the next years, after roughly $200B in spending in 2025.
Expectations also call for “incremental spend” for other parts of the semiconductor value chain, including memory and storage, networking and connectivity, semiconductor equipment and electronic design automation, and even analog and microcontrollers, the analysts added.
“Demand signals from key cyclical end markets are also pointing to a more synchronized recovery profile this year, which, against a backdrop of lean channel and customer inventory levels, should drive above-seasonal growth profiles for the analog/broad-based names,” the analysts posited. “Net, we expect [the] semi industry revenue to grow 15%+ this year, with [wafer fab equipment] up 12-15% Y/Y. While rising memory prices have not impacted demand so far, we believe this could potentially limit end demand in the second half of the year, particularly in the PC and smartphone segments.”