Semiconductor shares have seen a big boost on the back of strong demand for Nvidia’s AI chips, but Wall Street expects some in the sector still have more upside ahead. The iShares Semiconductor ETF has jumped 42% for the year amid an artificial intelligence-driven boom. Nvidia , which has the largest market cap in the group of $1.1 trillion, has surged nearly 230% in 2023. The company’s second-quarter earnings results have Wall Street enthusiastic that the demand for AI can drive chip stocks even higher, despite the blockbuster year so far. With this in mind, CNBC Pro screened for the Wall Street analysts’ favorite names in the semiconductor basket. The stocks in the list met the following criteria: Buy rating from 55% of analysts or more Upside to average price target of at least 15% Take a look at some of the top picks, and analysts’ expectations for them going forward. The average price target on Nvidia shares suggests the highest upside potential among those on the list. Analysts estimate shares could rally an additional 33% from Wednesday’s close, with 72% of those covering the stock also rating it a buy. Advanced Micro Devices has the second-largest market cap among the list. Wall Street’s average price target on its shares suggests the stock could rise nearly 30%. Its shares have already soared 57% in 2023. Rosenblatt named both AMD and Nvidia as its top AI picks in a Friday note. Still, AMD shares were down 7% on Thursday as the Nvidia-powered gains in the early morning fizzled. Shares of On Semiconductor notably pulled back by 15% in August. However, analysts believe the stock has more than 30% upside potential. Slightly over half the analysts who cover the stock give it a buy rating. The company also posted a beat on both top and bottom lines in the second quarter. The stock is up 45% year to date. Marvell Technology has the highest share of buy ratings in the list, with 83% of analysts bullish on the stock. The average price target implies nearly 16% upside potential. To be sure, while Susquehanna reiterated the company as positive in a Wednesday note, the firm noted continued softness in traditional networking, storage and consumer segments could offset some of its AI growth potential. Shares have gained about 57% in 2023. The company is scheduled to announce its earnings Thursday after the bell. —CNBC’s Michael Bloom contributed to this report.
