Bank of America Bets on 2 Little-Known ‘Strong Buy’ AI Chip Stocks

The surge in AI investment is rippling through the semiconductor supply chain in ways that go beyond GPUs and CPUs. Building and scaling modern data centers requires a growing amount of specialized connectivity and networking silicon, creating opportunities for companies positioned in the high-speed data movement segment of the market.

While Nvidia grabs headlines for powering AI brains, a different class of chipmakers is quietly building the nervous system that connects them. As data centers scale to support ever-larger models, the ability to move information quickly and reliably between servers, racks, and processors is becoming just as important as raw computing power.

This shift is reshaping where value is created in the semiconductor ecosystem. Training and running modern AI workloads requires massive volumes of data to be transmitted at extremely high speeds, often across complex networks of hardware. That has turned connectivity, signal integrity, and power efficiency into strategic priorities for hyperscalers racing to expand their AI infrastructure.

The result is a growing focus on the less glamorous layers of the stack – the chips that manage, amplify, and route data rather than process it. These components may not perform calculations, but without them, AI systems cannot scale effectively. As bottlenecks move from compute to communication, spending is beginning to follow, opening the door for suppliers positioned at this critical junction of performance and efficiency.

Bank of America’s 5-star tech expert Vivek Arya has taken this logic to its natural endpoint – he has picked out two lesser-known AI chip stocks to buy at current levels. These are companies connected to the industry – in exactly the supporting roles that are now growing ever more important.

After using TipRanks’ database, we found out that each ticker has also received enough support from other Wall Street analysts to earn a “Strong Buy” consensus rating. Let’s take a closer look.

Credo Technology Group (CRDO)

We’ll start with Credo Technology Group, the California tech company that has both hands fully enmeshed in networking and connectivity. Credo provides solutions and products for the high-speed bandwidth and wired connections that make data infrastructure function – and without which, AI capability would not be possible.

Prominent among Credo’s products are AECs, PCIe retimers, ethernet retimers, and optical solutions. These products provide the direct, high-capacity connections that interlink server racks, connect accelerator clusters, and provide essential GPU-to-GPU connections. Credo assembles these systems based on a high-end core technology, a solid architecture, and a system-level approach that provides a firm foundation.

In practical terms, what this means is that Credo can support AI infrastructure for the largest hyperscalers. The company’s products can meet the high-speed reliability that makes interconnections at the largest scales possible – connecting AI clusters with more than 1 million GPUs while maintaining low latency and high bandwidth, and, at the same time, allowing AI operations to scale up and scale out.

Recent trends – the expansion of AI data centers, the growth of generative and agentic AI – have been good to Credo – and that’s putting it mildly. Even competition from such major names as Marvell and Astera hasn’t been able to derail Credo’s strength. The company reported a huge 272% year-over-year revenue gain in its last quarterly release, which covered fiscal 2Q26. The top line in the quarter reached $268 million and beat the forecast by $33 million. The company’s non-GAAP EPS figure, of 67 cents, was 17 cents per share better than had been anticipated.

Bank of America’s Arya, who is rated by TipRanks among the top 2% of his Wall Street peers, notes both Credo’s status as an early provider of AECs and other high-end data center networking tech, and its ability to withstand competition. He writes, “As a pioneer of the AEC technology, CRDO had enjoyed near 90% share through 2024. Starting in 2025, competition from MRVL/ALAB emerged, with CRDO market share likely declining to the ~70-75% range. Nevertheless, we view CRDO as the technological, reliability, tech transition, and customer engagement leader in AECs with first mover advantage. If CRDO can maintain 50% market share through CY30E, we view AEC sales alone could ~4x to $3.5bn from ~$900bn in CY25E, or $10+ EPS power at current 65% GM, excluding any new meaningful impact from new optical ALCs (active LED cables), PCIe retimers, or omniconnect gearboxes. This is also in-line with: (1) CRDO’s recent $10bn total company TAM outlook by CY30, of which believe CRDO can capture 40-50% overall market share at ~$4-5bn in annual sales, or (2) ~8-10% share assumption of total ~$60bn AI connectivity TAM (5% of $1.2Tn+ AI TAM).”

Quantifying his stance, Arya gives the shares a Buy rating with a $200 price target that implies a 56% upside potential for the coming year. (To watch Arya’s track record, click here)

Shares in CRDO are currently trading for $128.02, and the $224.44 average target price implies a one-year gain of 75%. Overall, the stock holds a Strong Buy consensus rating, based on 12 reviews with a lopsided split of 11 Buys to 1 Hold. (See CRDO stock forecast)

MACOM Technology Solutions (MTSI)

MACOM, the second stock we’re looking at here, is based in Lowell, Massachusetts, and is known for its global footprint in the high-end networking field. MACOM has offices and operations across North America, Europe, and East Asia, and boasts a market cap of $16.4 billion.

This company offers a wide portfolio of essential products, including RF/Microwave and mmWave digital phase shifters, diodes, frequency converters, transformers, equalizers, and limiters—a long list; as well as optical devices such as lasers, diodes, and LED/laser drivers; and networking devices and products for a wide range of applications.

In addition, MACOM can handle foundry manufacturing in the RF field, producing products using top-end GaAs and GaN MMIC technology. MACOM has three leading semiconductor fab facilities and can provide advanced research and development capabilities.

In the last quarter reported, fiscal 4Q25, MACOM had a top line of $261.2 million, growing 30% year-over-year and just skimming over the forecast by $1 million. The bottom line, in non-GAAP measures, came to 94 cents per share—and beat expectations by a penny.

In his coverage of the stock for Bank of America, Arya notes that the expansion of data center capabilities has been one of the prime supports for MACOM recently. As the top-rated analyst puts it, “MTSI is a clear beneficiary of the move from 800G to 1.6T, which will structurally increase demand for 200G/lane components while retaining a durable, growth-oriented aerospace and defense growth engine. Demand visibility remains high with 4Q25 seeing record backlog and book to bill exceeding 1. MTSI is ahead of a multi-year runway from 200G/lane photodetectors (PDs), drivers/TIAs for EMLs, and a broader interconnect portfolio that can keep datacenter growth strong into FY26.”

Arya goes on to rate MTSI as a Buy, and his $260 price target indicates room for a 12-month gain of 19%.

Overall, MACOM has earned a Strong Buy rating from the Street’s consensus, based on 12 reviews that include 9 Buys and 3 Holds. However, the stock’s big gains – up by 79% over the past year – have pushed it substantially above the $204.75 average price target. With this in mind, watch out for either price target hikes or rating downgrades shortly. (See MTSI stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.