Bank of America handed investors a bullish roadmap for semiconductor spending in 2026.
Analyst Vivek Arya forecasts that global chip sales will surge roughly 30% to reach $1 trillion, a milestone the industry had previously targeted for 2030.
But the AI boom is only halfway through a decade-long transformation, meaning the semiconductor leaders capturing this surge could deliver outsized returns.
Why the chip boom matters now
The path to a $1 trillion semiconductor market isn’t academic; it’s a measure of how critical AI infrastructure has become.
Every major tech company is racing to upgrade data centers, and every chip manufacturer in the supply chain stands to benefit.
Bank of America estimates the AI data-center systems market alone could exceed $1.2 trillion by 2030, growing at a compound annual rate of 38%.
The immediate implication is that chip stocks that own the most critical niches, those with the widest moats and deepest margins, are likely to outperform.
Top 5 stocks to buy for 2026
Nvidia (NVDA)
The AI poster child remains the sector leader. Nvidia’s data center business now accounts for roughly 90% of revenue, and demand still outpaces supply.
The company’s latest quarter saw revenue of $57 billion, up 62% year-over-year, with momentum accelerating into the new year.
Arya set a price target of $275, implying 56% upside, arguing the stock trades at compelling multiples relative to its growth rate, with robust free cash flow generation and multiple near-term growth catalysts on the horizon.
Broadcom (AVGO)
Broadcom has emerged as the dominant supplier of custom AI chips (ASICs) for hyperscalers like Google, Meta, and Amazon seeking to diversify away from Nvidia’s general-purpose GPUs.
Broadcom controls roughly 70% of the ASIC market and delivers superior cost efficiency for inference workloads, critical for controlling data-center economics.
BofA’s price target of $450 suggests 47% upside, backed by double-digit earnings growth and industry-leading profitability.
Lam Research (LRCX)
Equipment makers represent the “second wave” of the AI boom. Lam Research supplies the wafer fabrication tools chipmakers need to produce advanced memory and logic chips at scale.
As manufacturers ramp capacity for high-bandwidth memory and next-generation packaging, demand for Lam’s etch and deposition systems remains robust.
The company recently beat guidance with record margins, signaling strength in AI-driven orders. BofA’s $195 target implies 19% upside.
KLA (KLAC)
Process control and yield management become increasingly critical as chip geometry shrinks and complexity soars.
KLA supplies the inspection and metrology systems that detect defects and prevent costly manufacturing failures.
With a 70-75% market share in process control and pricing power derived from the extreme value of yield improvement, KLA is quietly essential to the entire semiconductor manufacturing ecosystem.
Analog Devices (ADI)
Mixed-signal semiconductors and data converters power far more than just AI. Analog Devices offers exposure to the broader semiconductor recovery through its diversified portfolio spanning industrial, automotive, and consumer applications.
Recent quarters show strong sequential momentum and double-digit growth in key end markets, signaling a return to health after a cyclical downturn.
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