Bank of America's 2026 Semiconductor Favorites

Bank of America's Semiconductor Preferences for 2026

Bank of America has identified semiconductor companies that could make a significant impact in 2026, with an expectation that ongoing investments in artificial intelligence will continue to increase during this period. The analysts' report emphasizes that the transformation process in the sector is crucial as traditional computing infrastructures adapt to AI-based workloads. In this context, Nvidia (NVDA), Broadcom (AVGO), and Lam Research (LRCX) stand out.

2026 Targets and Expectations

Analysts forecast that semiconductor sales could approach $1 trillion for the first time in 2026. It is expected that sales of wafer fabrication equipment will experience double-digit growth. The organization highlights that closely monitoring the cash flow of AI and large companies may lead to stock performance fluctuations, while new and higher-capacity manufacturers could offset these fluctuations.

Other Options and Mid-Sized Companies

Among the large-scale companies listed by Bank of America are KLA (KLAC), Analog Devices (ADI), and Cadence Design Systems (CDNS), while mid and small-sized companies include Credo Technology (CRDO), MKS (MKSI), Macom Technology Solutions (MTSI), Teradyne (TER), and Advanced Energy Industries (AEIS).

Strategies for Investors

Bank of America emphasized that investors should focus on leading stocks. Despite fluctuations in the stock values of large companies like Nvidia and Broadcom, these firms still offer attractive options for investment. The semiconductor sector is expected to show growth of 50% or more this year, driven by strong data center usage, declining supply, and competition among leading producers.

Future Themes

Other themes identified for 2026 include integrated optical technologies, robotics, and quantum. In these areas, Lumentum (LITE) and Coherent (COHR) are highlighted as significant players. Additionally, the White House's policies toward the robotics sector are likely to have positive effects for Teradyne. Although the quantum field is still in its early stages, it is believed to offer significant opportunities in the long term.