BofA Securities analyst Vivek Arya’s top picks were Nvidia Corp ( NVDA ) (Buy, price target of $1,100) and Broadcom Inc ( AVGO ) (Buy, price target of $1,680) in artificial intelligence, considering the adoption of accelerated/AI servers a generational shiſt with NVDA and AVGO, the leaders.

However, he noted the rising tide – accelerator market ~2xing to $200 billion over next three years – could create volatile but fruitful opportunities among the #2 vendors, including Marvell Technology, Inc ( MRVL ) (#2 to AVGO in AI networking, up and comer in custom chips) (Buy, price target $95), Micron Technology ( MU ), Inc (potential to rapidly expand high-bandwidth memory or HBM market share behind Korean peers), and Advanced Micro Devices, Inc ( AMD ) (#2 GPU and #3 AI accelerator vendor) (Buy, price target $195). 

Each “junior samurAI” trades interestingly at a valuation premium to its respective leader, so greater stock volatility is to be expected, as per the analyst. However, as the leader expands the market TAM, the junior can likely continue to carve a profitable niche.

Arya expects demand for HBM to grow at a 48% CAGR from the calendar year 2023-2027 to cross $20 billion and for Micron to expand its share to the mid-20s% vs.