Major players in the semiconductor industry received a boost on Monday, with positive developments supporting gains in their stock prices. The news highlighted the crucial role these companies play in powering emerging technologies like artificial intelligence.
At the forefront was Arm Holdings, whose chip designs underpin many of the world’s smartphones and increasingly data centers. The British semiconductor firm saw its shares climb over 1% after an analyst report praised Arm’s proliferation across the tech ecosystem. KeyBanc’s John Vinh raised his price target on Arm stock, citing the company’s “increasing traction” in areas like data centers and personal computers.
Mr. Vinh expects Arm’s CPUs to see wider adoption in data centers thanks to Nvidia’s new Grace superchips built on Arm architecture. He also noted optimism from PC makers like Lenovo about prospects for Arm-based computers. The positive outlook reflects how Arm’s energy-efficient chip designs could reshape computing landscapes long dominated by Intel and AMD’s x86 chips.
Micron Technology also got a price target boost from KeyBanc on Monday, sending its stock up nearly 0.5%. The memory chipmaker is well-positioned to benefit from AI’s ravenous appetite for high-performance chips, according to Mr. Vinh. He cited Micron’s superior HBM3e memory products compared to rival SK Hynix, which could see strong demand from AI datacenter buildouts using Nvidia’s latest processors.
“As investors increasingly recognize how strong Micron’s position is in HBM, we expect the stock to rerate and be given credit as an AI play,” Mr. Vinh wrote.
Meanwhile, Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, jumped over 1% after the U.S. government pledged significant funding to support its new factories in Arizona. The U.S. Commerce Department awarded TSMC $6.6 billion in grants and up to $5 billion in loans from the 2022 CHIPS Act, aimed at reviving domestic semiconductor manufacturing.
The investments in TSMC’s U.S. fabrication plants come as chipmakers globally race to meet soaring demand for advanced chips powering AI applications, data centers, and next-gen electronics. TSMC’s cutting-edge manufacturing capabilities make it a crucial supplier for leading chip designers like Apple, Nvidia, AMD and others.
Analysts see AI as a rising tide lifting the entire semiconductor sector. In addition to boosting Nvidia, Deutsche Bank issued a buy rating on Broadcom with a $1,500 price target. The firm expects Broadcom’s connectivity chips and custom AI processors to benefit from the AI boom, alongside gains from its VMware acquisition.
The positive semiconductor news speaks to a tech landscape rapidly being reshaped by the AI revolution. As bleeding-edge applications like large language models and generative AI go mainstream, semiconductor giants are jockeying to provide the vital silicon engines powering this next computing paradigm shift. Monday’s developments reinforce their critical enabling role.
