It’s a good day for chip stocks, as several are in positive territory, if only slightly, in Tuesday afternoon’s trading session. Bank of America recently came out with a list of chip stocks that were looking like positive buys going into the end of 2023 and beyond. There will be several familiar names on this list, as well as perhaps, a few less considered.
Making the cut at Bank of America, presented by a team of analysts including Vivek Arya, were familiar names like Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO), and ARM Holdings (NASDAQ:ARM). Meanwhile, Applied Materials (NASDAQ:AMAT) also made the list, as did long-time calculator kingpins Texas Instruments (NASDAQ:TXN). All five were in the green as of Monday afternoon, and less than half a percent separated the smallest gain from the largest at one point.
Nvidia and Broadcom are gaining, Arya noted, from the rising spend in cloud computing and artificial intelligence. Meanwhile, ARM Holdings is gaining on the strength of its chip design efforts. Texas Instruments did suffer a bit from its connection to consumer devices, which have “largely seasonal” demand, as Arya put it. And Applied Materials is gaining on its strength as a chip market supplier. While many chip stocks had a fairly lousy September, there’s still quite a bit of optimism, especially as we go into the holiday shopping season, peak demand for those “largely seasonal” products.
Which Chip Stocks are a Good Buy Right Now?
Most of the chip stocks discussed here end up in the same fairly narrow band of upside potential. That is, of course, except for Nvidia, the clear winner. NVDA’s average price target of $647.04 implies 40.52% upside potential. Meanwhile, ARM Holdings, a Moderate Buy, can only coax 13.25% upside potential out of its average price target of $62.32.
