AI is on the rise, with semiconductor chips crucial for its advancement. RBC predicts a revenue increase for chip companies from $220 billion in 2025 to over $550 billion by 2028. Nvidia leads this revolution with a market cap of $4.3 trillion and a diverse product portfolio, including data center AI accelerators.

Nvidia reported a strong third-quarter performance with revenue hitting $57.1 billion, a 62% YoY increase, and EPS climbing 60% to $1.30. Cash flow was robust, closing the quarter with $60.6 billion in cash and minimal debt. Analysts have a “Strong Buy” rating for NVDA stock, with a mean target price of $255.78.

Astera Labs, valued at $31 billion, specializes in connectivity solutions for AI and cloud infrastructure. The latest quarter saw impressive revenue growth to $230.6 million, more than double the previous year. Cash flows also improved significantly, with Q4 2025 guidance pointing to an EPS of $0.51.

Micron is a leader in memory chip design, with a market cap of $410 billion. The company exceeded expectations in the last quarter with a 56% YoY revenue surge to $13.6 billion and earnings of $4.78 per share. Micron’s guidance for fiscal Q2 2026 projects substantial growth in revenue and earnings. Analysts rate MU stock as a “Strong Buy” with a mean target price of $329.92.

Read more at Yahoo Finance: RBC Capital Sees a $550 Billion Reason to Buy These 3 Chip Stocks