Nvidia, Broadcom, Marvell Poised To Benefit From AI-Driven Semiconductor Upswing, JPMorgan Says

JPMorgan analyst Harlan Sur, in a note on Wednesday, said the semiconductor and semiconductor capital equipment group is entering the fourth quarter of 2025 earnings season with AI-driven demand and improving cyclical trends that should keep fundamentals supportive into 2026.

Earnings Season Setup Supports Outperformance

Sur expects companies to deliver fourth-quarter results that come in line with or modestly above expectations and to pair those reports with constructive commentary on first-quarter and full-year 2026.

He said that the setup should extend the positive earnings revision cycle seen in recent quarters.

Sur noted that more than 70% of the semiconductor and semicap companies he covers posted positive revisions in the third-quarter of 2025.

The analyst expects that momentum to accelerate through fourth-quarter reporting.

AI Infrastructure Demand Stays Durable, Capacity Looks Tight

Sur tied his outlook to sustained AI-led infrastructure spending, pointing to rapidly rising inference demand and increasing compute intensity across AI workloads.

The analyst also said the 2026 supply chain already looks heavily booked, especially for leading-edge foundry capacity and memory and storage, supporting visibility for key suppliers.

Sur still sees upside for AI-levered names.

Stock Picks Reflect AI Scale and a Broadening Recovery

Sur said the AI accelerator opportunity has expanded meaningfully, pegging the market at about $200 billion in 2025.

He expects AI spending to flow beyond compute into memory and storage content for AI servers, networking and connectivity.

At the same time, Sur said cyclical demand signals continue to improve and look more synchronized, and lean inventories could drive above-seasonal growth for analog and broad-based names.

He expects semiconductor industry revenue to grow more than 15% this year, with WFE up about 12% to 15% year over year, while warning that rising memory prices could weigh on second-half demand—especially in PCs and smartphones.

Sur's top picks include Overweight Broadcom Inc (NASDAQ:AVGO), Marvell Technology Inc (NASDAQ:MRVL), Nvidia Corp (NASDAQ:NVDA), Analog Devices Inc (NASDAQ:ADI), and Micron Technology Inc (NASDAQ:MU) among semiconductors, which he ties to AI and accelerated compute spending across compute, connectivity, and memory.

He kept KLA Corp (NASDAQ:KLAC) as his top semicap pick, supporting the group alongside Applied Materials Inc (NASDAQ:AMAT) and Lam Research Corp (NASDAQ:LRCX).

In EDA and IP, Sur highlighted Synopsys Inc (NASDAQ:SNPS) as his top pick on rising chip complexity.

The analyst also cited MACOM Technology Solutions Holdings, Inc (NASDAQ:MTSI) and Overweight Astera Labs Inc (NASDAQ:ALAB) for small-cap exposure to infrastructure and AI/datacenter spending.

He reiterated additional preferences including Cadence Design Systems, Inc (NASDAQ:CDNS), Western Digital Corp (NASDAQ:WDC), and Astera Labs (NASDAQ:ALAB) as he sees industrial and auto cyclicals helping drive faster positive revenue and EPS revisions as demand improves off lean inventory levels.

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