Artificial intelligence demand still looks very strong, according to top Evercore analyst Mark Lipacis, as supply limits continue affecting key AI networking and infrastructure products. The firm kept Buy ratings on several major AI chip and networking companies, including Nvidia (NVDA), Broadcom (AVGO), and Marvell Technology (MRVL).
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200% short exposure to NVDA with NVDSAccording to Evercore’s latest industry checks, demand for large AI systems remains strong as cloud companies continue building bigger AI data centers. However, supply still cannot fully keep up with demand, especially for networking hardware used to connect large numbers of AI chips and servers.
Nvidia and Broadcom Remain Key AI Names
Evercore said Nvidia’s NVLink system remains the leading technology for connecting AI GPUs inside large AI clusters. The firm also expects Nvidia to become a major player in co-packaged optics (CPO), a newer technology designed to improve speed and lower power use in AI data centers.
Meanwhile, Broadcom is seen as a leader in the fast-growing 1.6T DSP market used in next-generation AI systems.
The report also highlighted Marvell, where Evercore expects the company to keep a strong share in the growing 800G DSP market. The firm added that Marvell’s share in newer 1.6T products could improve further over the next few years.
AI Spending Still Looks Strong
The report suggests that major cloud companies are still increasing AI spending despite rising costs across the industry. Evercore noted that demand for AI networking products remains strong enough that supply shortages are still a major issue.
The firm also pointed to growing interest in newer AI areas such as optics, AI server CPUs, and advanced networking systems, which could become the next big growth drivers for AI infrastructure companies.
Even after the huge rally in AI-related stocks over the past year, Wall Street analysts continue seeing strong long-term demand for AI chips, networking products, and data center infrastructure.
Which Chip Stock Is the Best Buy?
Currently, Nvidia, Broadcom, and Marvell all carry Strong Buy analyst consensus ratings from Wall Street. Among them, analysts see the highest upside potential in Nvidia stock at about 27%, followed by Broadcom at roughly 14%. Meanwhile, Marvell’s average analyst price target currently suggests downside from current levels.
