AI Momentum Powers Nvidia, Arm And Chip Supply Chain In BofA Recap

Bank of America Securities analyst Vivek Arya on Monday recapped takeaways from a tech conference in which 27 companies attended.

Representatives from the following companies attended: Nvidia Corp (NASDAQ:NVDA); Advanced Micro Devices (NASDAQ:AMD); Intel Corp (NASDAQ:INTC); Marvell Tech (NASDAQ:MRVL); Arm Holdings (NASDAQ:ARM); Coherent (NYSE:COHR); Lumentum Holdings (NASDAQ:LITE); ON Semiconductor (NASDAQ:ON); Texas Instruments (NASDAQ:TXN); Synopsys (NASDAQ:SNPS); and Lam Research Corp (NASDAQ:LRCX); KLA Corp (NASDAQ:KLAC); and Applied Materials (NASDAQ:AMAT).

Arya noted that the overall tone was positive across computing and networking for GPU (Nvidia and AMD) and ASIC (Marvell) vendors.

He maintains Nvidia with a Buy rating with a $180 price target. Nvidia remains best positioned to benefit from the ongoing AI tide, supported by a multi-year lead in performance (AI scaling), pipeline, incumbency, scale, and developer support, he adds.

Also, the company’s rack-scale systems are in full production and overall AI demand continues to rise for inference reasoning and sovereign AI.

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Arm also expects a continued 50% server CPU deployment share this year, Arya said.

Arya raised his price target on Arm to $150 (from $135) on the continued proliferation (market share gain) of Arm-based CPUs in the data center, above peers, though justified by Arm’s superior growth profile, sticky Licensing business, and expanding Royalty rates.

Concerns about tariff-related pull-ins remain at Intel for PCs. Still, AMD continues to see strong sell-through in the second quarter, aided by higher-ASP new products, and could even see seasonal second-half strength, the analyst said.

Arya said Lam Research, KLA Corp, and Applied Materials indicated strong momentum in leading-edge F/L and advanced DRAM WFE this year, which is helping to offset weakness in China and trailing-edge spending to sustain mid-single-digit Y/Y growth in calendar 2025.

The analyst said KLA Corp also suggested that mid-single-digit Y/Y WFE growth in calendar 2026 could be a plausible assumption led by strong 2nm/GAA investments.

Lam Research noted NAND upgrades in the early stages across multiple customers inside a $40 billion multi-year opportunity, Arya said. Crucially, all vendors suggested China is “de-risked” this year despite recent restriction noise and can settle at 25%- 30% of sales, the analyst noted.

Arya raised his Lam Research price target to $100 (from $90), which was justified by improving NAND prospects as a leading-edge foundry/logic, and advanced DRAM (DDR5/HBM) remained strong.

The analyst raised his price target on KLA Corp to $900 (from $825), given increasing leading-edge F/L ramp visibility, advanced packaging TAM expansion, and best-in-class profitability.

He raised his Lumentum price target to $78 (from $70), justified by broad-based strength in the data center.

Arya raised his On Semiconductor price target to $60 (from $55), which was justified following management calling the second-quarter auto bottom with broad-based recovery across auto and industrial expected in the second half.

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