BofA hikes 2026 chips forecast to $1.3 trillion, names Nvidia, Broadcom, Marvell, AMD as top drivers
The AI gold rush is growing so fast that even bullish analysts are having trouble keeping up with their predictions.
The firm has made a major upgrade to its global semiconductor outlook, Bank of America analyst Vivek Arya said in a new note to clients. Increased 2026 revenue target to $1.3 trillion; this was a $300 billion jump from the estimate the bank provided just four months earlier. Nvidia (NVDA) and Broadcom (AVGO) continue to power these AI ambitions, according to Arya.
“We continue to think AI/data center will drive most of the gains (via compute, networking, memory) as the industry contributes to growths in inventory replenishment and robotics on-ramp,” Arya said.
The bank expects the total semiconductor market to reach the $2 trillion milestone by 2030. This implies a compound annual growth rate (CAGR) of 20% by the end of the decade; This is more than double the industry’s average growth rate of 9% over the past 10 years.
To reach this finish line, Arya argued that the industry has entered a period of “pioneering logic density” where the complexity of chip designs requires an increase in specialized tooling.
For investors looking to capture this momentum, BofA is doubling down on its support for “AI computing” leaders, including Marvell Technology (MRVL) and Advanced Micro Devices (AMD). Beyond chips, the firm is also flagging opportunities in chipmaking equipment through names like Applied Materials (AMAT) and Lam Research (LRCX).
Arya also noted an impending recovery for electronic design automation (EDA) software firms such as Cadence (CDNS) and Synopsys (SNPS). As the broader industry stabilizes, these names serve as a “pick and shovel” play for the design phase of the AI boom.
But the report also revealed cracks in the broader hardware market. While AI is advancing rapidly, traditional consumer sectors such as smartphones and PCs remain a significant drag on the industry. Arya warned that consumer demand may remain stagnant into 2027, which will continue to weigh on the outlook for players such as Qualcomm (QCOM) and Skyworks (SWKS).
This bifurcated view suggests that gains are increasingly concentrated in a handful of high-priced players as the number of headlines increases.
The disparity is striking. BofA shows a 43% year-over-year increase in compute and storage, compared to a 9% decline in wireless.
There is also a growing mathematical challenge to these aggressive chip predictions. BofA’s analysis suggests global cloud capex must exceed $1 trillion for chip vendors to hit 2027 sales targets; This is significantly higher than the current consensus of $872 billion. Such growth is not impossible; The company states that capital expenditures of large private programs such as Stargate, government funds and businesses may accelerate this year.
