Semiconductor stocks have rebounded this week, led by Nvidia and Broadcom, among others. Factors include still-robust AI chip sales, improved smartphone and PC markets, and bottoming industrial and automotive markets.
On Wednesday, the Philadelphia semiconductor index, known as SOX, surged 4.9%. And in the first three trading days this week, the index advanced 8.4%.
However, on the stock market today, the SOX ended the regular session down 0.2%. The SOX includes the 30 largest semiconductor stocks traded in the U.S.
In a client note on Thursday, Bernstein analyst Stacy Rasgon said Broadcom stock and Nvidia stock remain his top picks in the semiconductor sector. He rates both as outperform.
Investor sentiment around AI chip stocks "has taken a pause" but "demand clearly has not," Rasgon said.
Nvidia Stock, Broadcom Stock On The Rise
Rasgon has a price target of 195 on Broadcom stock and 155 on Nvidia stock.
On Thursday, Broadcom stock jumped 4% to close at 164.56. Nvidia stock advanced 1.9% to 119.14.
Speaking at the Goldman Sachs Communacopia Technology Conference on Wednesday, Nvidia Chief Executive Jensen Huang said AI chip demand remains intense.
"We've got a lot of responsibility on our shoulders, and we're trying to do the best we can," he said. "And here we are ramping Blackwell. And it's in full production. We'll ship in Q4 and scale it, start scaling in Q4 and into next year."
He added, "And the demand on it is so great, and everybody wants to be first. And everybody wants to be most. … So the intensity is really, really quite extraordinary."
Rasgon said earlier reports of a delay in Blackwell products turned out to be a "nothing burger."
Nvidia stock is on two IBD lists: IBD 50 and Leaderboard.
Broadcom stock is on two different IBD lists: Big Cap 20 and Tech Leaders.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
