There is no doubt that there has been explosive growth around artificial intelligence. Technology stocks tied to AI have generally seen their values skyrocket over the last two years or more. And investors have made significant returns if they were invested in the A.I. leaders. But…
There are also now concerns over valuations reaching too lofty levels to justify. And there are obvious concerns about how much debt and circular financing activities are being relied upon to fuel that growth for years into the future.
Are strategic investors supposed to go all-in on the theme to continue in 2026 for A.I. related stocks? Or are they supposed to look elsewhere for better value and where growth out to 2030 and beyond hasn’t already been priced in?
BofA Securities’ Vivek Arya and the semiconductor research team have released their outlook for the year ahead for U.S. semiconductor stocks. The report is a list of its top picks for A.I. growth. The tagline to the 2026 Year Ahead report — “AI still the place to be, expect choppy still cheerful year for chips”…
While Arya and the research team see a volatile (but fruitful) year ahead, they are calling for AI chip sales growth of 30% with 10% growth in fab/capital equipment demand. Here are the top 5 themes:
- A.I. race is still in early/mid stages, focus on sector leaders
- Semi-caps solid as the unsung heroes of the revolution
- EDA (electronic design automation) catch-up
- Analog’s unconvincing turnaround, means to stay selective
- New CPO (co-packaged optics), Robotics, Quantum
ALSO READ: 10 UNDERVALUED BLUE CHIPS FOR 2026
Investors should read the disclaimers at the end of this reporting before deciding whether to follow along with BofA’s outlook or go their own way in 2026.
THEIR “COMPUTE” LEADERS TO WIN!
Here are BofA’s top “Compute” large-cap picks for 2026:
- NVIDIA Corp. (NASDAQ: NVDA) at $176.29 — price objective $275.00
- Broadcom Inc. (NASDAQ: AVGO) at $339.81 — price objective $500.00
- Advanced Micro Devices, Inc. (NASDAQ: AMD) at $207.58 — price objective $260.00
- Credo Technology Group (NASDAQ: CRDO) at $142.02 — price objective $200.00
A.I. CAPITAL SPENDING & TESTING
These are BofA’s top picks for capital equipment and testing (stock ticker, price, price objective):
- Lam Research (NASDAQ: LRCX) at $164.30 — price objective $195.00
- KLA Corp. (NASDAQ: KLAC) at $1,225.11 — price objective $1,450.00
- Applied Materials (NASDAQ: AMAT) at $261.27 — price objective $300.00
- Teradyne (NASDAQ: TER) at $194.70 — price objective $235.00
- MKS (NASDAQ: MKSI) at $159.31 — price objective $200.00
- Advanced Energy Industries (NASDAQ: AEIS) at $216.87 — price objective $260.00
ANALOG’s UNCONVINCING TURNAROUND (“STAY SELECTIVE!”)
BofA’s top 2026 analog picks:
- Analog Devices (NASDAQ: ADI) at $280.44 — price objective $320.00
- NXP Semi (NASDAQ: NXPI) $231.83 — price objective $265.00
- MACOM Technology Solutions (NASDAQ: MTSI) at $175.29 — price objective $220.00
- Allegro Microsystems (NASDAQ: ALGM) at $26.72 — price objective $36.00
THAT EDA CATCH-UP PHASE
BofA’s top 2026 picks for EDA (electronic design automation) catch-up:
- Cadence Design Systems (NASDAQ: CDNS) at $318.43 — price objective $400.00
- Synopsis (NASDAQ: SNPS) at $454.67 — price objective $560.00
DISCLAIMERS
Please note that all of these A.I. stock picks, the rating and price objectives are issued by BofA Securities. Oggonomics does not have any formal ratings or price targets on any of these stocks.
Be advised that no single analyst report should ever be the sole basis to buy or sell a stock. Analysts can also get their thesis wrong, and fundamentals can change in an instant. And lastly, no research reports ever come with money-back guarantees in the event that investors lose money or their price expectations do not come to fruition.
