Three stocks that could re-energize the AI trade this week
The artificial intelligence trade could get a boost this week with three semiconductor companies set to report earnings after a rough period for the group, according to Bank of America. “We expect beat/raise results from AVGO, MRVL and CRDO to re-energize interest in [artificial intelligence] semis, since capex by U.S. cloud customers and sovereign AI investments remains the only dependable bright demand spot in the global economy,” analyst Vivek Arya wrote in a note to clients this week. Arya’s remarks come as each of those three chip stocks and others closed out last week’s run in negative territory. Bloomberg News reported last week, citing people familiar with the matter, that the Trump administration is looking to toughen restrictions on China’s chip industry. The PHLX Semiconductor Sector Index dropped 7.2% in the period, while the S & P 500 declined around 1%. That move lower put the PHLX down more than 5% year to date. .SOX YTD mountain .SOX, year-to-date AI chip darling Nvidia also closed last week more than 7% lower after it posted a decline in its gross margin for the fourth quarter, and its revenue beat for the quarter was its smallest in two years . That stock has underperformed the broader market this year after developments from Chinese startup DeepSeek back in January raised investor anxiety around AI competition and spending. But a turnaround for the group could be in store over the coming days. U.S. chip giant Broadcom , which fell nearly 9% last week and has slid more than 16% year to date, could help to reinvigorate enthusiasm among investors with its first-quarter fiscal 2025 results out Thursday after the bell. “We expect management to restress the $60-$90bn long-term [service addressable market] in custom chips (XPU) and networking, with growing engagement with new partners (we think OpenAI, Apple),” Arya wrote. “Consensus models only ~$32bn by CY27 or < 50% SAM capture.” For Marvell Technology , which is set to report after the bell on Wednesday, Arya believes telecommunications recovery, “solid” AI chip demand from Amazon and more growth in AI optics could lead to consensus upside for silicon and optics sales. “Separately we expect MRVL to grow with Amazon even in CY26 on continued participation in custom chip program (successor to Trn-2 called Ultra/2.5, or some design work in Trn-3),” the analyst also wrote. Shares shed more than 11% last week and have decreased more than 19% in 2025. In addition to Marvell, Arya said chipmaker Credo Technology could be a beneficiary of demand from Amazon for active electrical cables used for AI clusters. Credo, whose shares plunged more than 17% last week and have fallen more than 21% year to date, kicks off the trio of earnings results on Tuesday after market close.
