① Morgan Stanley The report predicts that chip stocks will remain one of the best-performing sectors in the US stock market next year and has released a list of "Top Chip Stocks for 2026," including Nvidia. Broadcom Astera Labs and others ranked in the top three; ② Morgan Stanley analysts believe that semiconductors The industry's boom cycle is far from over, and global demand for artificial intelligence... The unlimited demand for computing power is a key variable.
Morgan Stanley released a new research report stating that, driven by an unprecedented surge in artificial intelligence (AI) infrastructure and a robust destocking process for traditional analog chips/MCUs (microcontrollers), the "long-term bull market logic" for chip stocks remains intact, and chip stocks are likely to be one of the best-performing sectors in the US stock market next year.
Along with the bull market predictions came a list of "Top Chip Stocks for 2026": Nvidia , Broadcom , and Astera Labs ranked in the top three.
According to Morgan Stanley analysts, the semiconductor industry's boom cycle is far from over, and chip stocks still have huge upside potential.
"For three consecutive years, the biggest debate in the market has focused on artificial intelligence semiconductors , with AI chip companies accounting for a significant portion of the chip industry's index weighting. To date, the unlimited global demand for AI computing power remains the most critical variable," they wrote.
Morgan Stanley points out that Nvidia and Broadcom are the bank's two top picks in the semiconductor sector.
The analyst explained, "At the time of writing, enthusiasm for ASICs is high, and the market is betting on very strong growth, but with various bottlenecks emerging, we still believe Nvidia will be a leader in cloud computing." The solution with the highest ROI in the field, especially as the Vera-Rubin architecture begins to ramp up production in the second half of 2026.
"While the leverage effect is limited, we still believe the market underestimates Nvidia's position, " the report stated.
Furthermore, the bank gave AMD and Marvell Technology a "market perform" cautiously bullish rating, citing the potential for "substantial upside" for both companies, but also acknowledging existing uncertainties. This contrasts with its assessment of Intel... Morgan Stanley is skeptical of Intel's foundry business and even more cautious about it.
Astera Labs is a company specializing in data centers. The sector's favorite small-cap stock, especially the company's advancement of rack-level/scale-up optical interconnect ecosystem solutions through its acquisition of aiXscale, highlighting the company's strong entry into the field of optical interconnect/silicon photonics technology within data centers .
On the other hand, Morgan Stanley also pointed out that in the memory and semiconductor equipment sector, the growth of artificial intelligence could lead to tight supplies of memory and logic wafers. Therefore, Micron is the company's top choice in the memory market, although it is less inclined towards SanDisk. (Sandisk) is also rated "overweight".
In the field of chip equipment, Applied Materials and TSMC These are the two stocks that Morgan Stanley favors the most.
Finally, Morgan Stanley stated that the narrative and pricing logic for the analog chip market are largely the same as in 2025—albeit slowly, but still improving. Therefore, the bank is bullish on NXP Semiconductors. They believe it represents "the best combination of growth and value models among chip stocks"; while Analog Devices... Semiconductor valuations are higher, but they possess "stronger growth potential in the analog chip sector."
(Article source: CLS)
