AI boom driving chip stocks like NVIDIA, Broadcom, and TSMC upward with strong price upside
From Nasdaq: 2024-09-13 15:00:00
The stock market has experienced fluctuations lately, with tech stocks like chipmakers facing a decline in July and August. Despite concerns about stretched valuations resembling the dot-com bubble, the AI boom is driving chip stocks like NVIDIA, Broadcom, and TSMC upward.
AI’s practical applications make it different from the dot-com bubble era, reducing the risks of sector-related bubbles. Various sectors are adopting AI for tangible economic benefits like innovation, efficiency, and cost savings. Established infrastructure like cloud computing platforms supports the deployment of AI technologies unlike during the dot-com period.
The global AI industry is projected to reach over $184 billion in 2024 and surpass $826 billion by 2030. NVIDIA, Broadcom, and TSMC are set to benefit from this growth due to their crucial roles in the AI ecosystem. NVIDIA’s GPUs, Broadcom’s products for data centers, and TSMC’s manufacturing capabilities are essential for AI applications.
Brokers have increased the short-term price targets for NVIDIA, Broadcom, and TSMC due to factors like exports to Saudi Arabia, next-generation chip launches, and strong cash flows. NVIDIA offers a price upside of up to 71.1%, Broadcom up to 51.6%, and TSMC up to 46.9%. Shares of these companies have seen significant gains this year.
Zacks Investment Research points out a new top chip stock that has more room to grow than NVIDIA. This small but promising stock has strong earnings growth and an expanding customer base to meet the rising demand for AI, Machine Learning, and IoT. The global semiconductor manufacturing industry is expected to grow from $452 billion in 2021 to $803 billion by 2028.
Read more at Nasdaq: What AI Bubble? NVIDIA & 2 Other Chip Stocks With Strong Price Upside