BofA's Top 6 Chip Stocks for the $1 Trillion Semiconductor Surge
Bank of America sees global chip sales hitting $1 trillion in 2026, with NVDA, AVGO, LRCX, KLAC, ADI, and CDNS positioned to lead.
A trillion-dollar industry is about to get bigger.
Bank of America projects global semiconductor sales will surge 30% in 2026, pushing the industry past $1 trillion in annual revenue for the first time. Analyst Vivek Arya has identified six stocks positioned to capture the bulk of that growth—and the list isn't just Nvidia and Broadcom.
The Six Names
Beyond the obvious AI leaders, Arya highlights four large-cap semiconductor companies with dominant market positions:
Nvidia (NVDA) — Still the undisputed leader in AI computing. The company's GPUs command roughly $30,000 each, compared to an average chip price of $2.40. That pricing power isn't going anywhere.
Broadcom (AVGO) — Arya sees 47% upside from current levels, driven by double-digit EPS growth and what he calls "best-in-semis profitability." The company's free cash flow generation and capital returns remain exceptional.
Lam Research (LRCX) — A picks-and-shovels play on chip manufacturing. As fabs expand globally, Lam's equipment becomes essential.
KLA Corp (KLAC) — Arya notes KLA has the leading profit margin among chipmakers. It's also one of the most stable names in a volatile sector.
Analog Devices (ADI) — Less flashy than the AI plays, but ADI's analog chips go into everything from cars to industrial equipment. Steady demand, steady margins.
Cadence Design Systems (CDNS) — BofA's top pick in Electronic Design Automation. Every complex chip starts with design software, and Cadence leads that market.
Why These Six
The common thread: market share between 70% and 75% in their respective segments. These aren't companies fighting for scraps. They're the ones setting prices.
"Another year of solid 50%+ YoY growth in AI semis driven by strong data center utilization, tight supply, enterprise adoption and race between LLM-builders, hyperscale and sovereign customers," Arya wrote.
The AI data center systems market is projected to hit $1.2 trillion by 2030, growing at a 38% compound annual rate. That includes a $900 billion opportunity in AI accelerators alone.
Not Without Risk
Arya isn't pretending the path is smooth. The road to $1 trillion will be "choppy," he acknowledges, and no stock is "riskless."
The semiconductor sector is cyclical. Inventory buildups can turn into inventory hangovers. Tariff threats loom. China restrictions create demand uncertainty.
But the structural thesis remains intact. AI requires chips. More AI requires more chips. The companies that make and enable those chips are the toll collectors on that highway.
Positioning for 2026
For investors already heavy in Nvidia, the takeaway is diversification within the theme. Lam Research and KLA offer equipment exposure. Cadence and Analog Devices provide less correlated ways to play the same trend.
The trillion-dollar milestone isn't hype—it's math. The question is which companies will claim the largest share of that growth.
BofA is placing its bets.