Bank of America Securities’ analysts have named chipmakers Nvidia (NVDA) and Broadcom (AVGO) as “Top Picks,” anticipating a surge in global artificial intelligence (AI) capital expenditures in 2025. The analysts project that hyperscalers, including Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), and Amazon (AMZN) will significantly boost their AI capex, reaffirming a bullish outlook for data center and AI infrastructure spending. The firm estimates that AI capex will grow 44% year-over-year to $414 billion this year, with further surge to $432 billion in 2026.
The firm also noted that the AI hyperscaler spending in the first quarter of 2025 remained below expectations. BofA had projected the figure at $93.8 billion, but actual spending came to $92 billion. However, analysts believe that hyperscalers’ investment intent remains solid. For reference, Meta lifted its FY25 capex forecast to a range of $64 billion to $72 billion, up from $60 billion to $65 billion. Meanwhile, Google, Amazon, and Microsoft stuck to their prior guidance. The expanded spending is also poised to benefit AMD (AMD) and Marvell Technology (MRVL), BofA added.
Here’s Why BofA Is Bullish on the AI Boom
The research firm highlighted four key drivers for the continued scaling of AI infrastructure by hyperscalers:
- Rapid model size growth, almost doubling every six months
- Rapid expansion of derivative AI models such as DeepSeek AI
- Accelerated surge in inference demand, generating up to 100x more tokens than prior models
- Fast-paced AI adoption by sovereigns/governments and enterprises
Overall, BofA believes that growing AI investment strategies by hyperscalers will continue to sustain chipmakers’ growth. The analysts believe that both chipmakers and cloud computing giants (hyperscalers) are poised for another year of outsized growth backed by solid AI infrastructure boom.
Which Chips Stock Is the Best?
We used TipRanks Stock Comparison Tool to determine which chip stock is most favored by analysts. Investors can choose to invest in any of these companies after thorough research.
Currently, Nvidia, Marvell, Taiwan Semiconductor (TSM), and AVGO score Wall Street’s “Strong Buy” consensus ratings, with MRVL stock offering the highest upside potential among them.
