If you thought the chip rally might be running out of steam Oppenheimer doesn’t. The firm just came out swinging with a new note; they’re betting big on semiconductors, and they expect Q2 earnings to beat the Street, thanks to a red-hot AI infrastructure boom and signs of life in autos and industrials.
They’ve raised their price target for Nvidia (NVDA, Financials) to $200, up from $175 a nod to what they see as unrelenting demand for GPUs, particularly with the Blackwell platform ramping up ahead of the GB300 launch later this year. Broadcom (AVGO, Financials) got a PT hike too, from $265 to $305; that’s a pretty confident jump.
What’s driving the optimism? A few things starting with the sheer scale of AI data center builds. Oppenheimer says hyperscalers are now deploying over 1,000 Nvidia NVL72 racks every week; by year-end, they estimate more than 40,000 racks could be online. That’s staggering and it’s fueling demand for custom chips, power-hungry accelerators, and high-speed networking gear.
But it’s not just Nvidia. Custom silicon from AMD (AMD, Financials), Broadcom, and Marvell (MRVL, Summary) is seeing strong adoption too; as workloads grow more complex and compute-hungry, these firms are stepping in with purpose-built solutions.
There’s also a quiet comeback brewing in auto and industrial markets. Semiconductor content in cars is growing at over 10% a year; that’s great news for NXP (NXPI, Financials) and Texas Instruments (TXN, Financials), which are both positioned to benefit as EVs and ADAS (advanced driver-assistance systems) become standard.
Even with the SOX index already up 58% since April, Oppenheimer’s not backing down. They’re still bullish and they’re looking past short-term volatility to what they see as a long-term structural growth story, tied to AI, electrification, and edge computing.
In other words: this chip rally may still have legs.
This article first appeared on GuruFocus.