Goldman Sachs Endorses Nvidia and Broadcom as Top AI Stocks

Goldman Sachs has named Nvidia and Broadcom as top AI stocks to own, with analyst James Schneider giving both equities new Buy ratings. Nvidia is seen as the center of the AI revolution due to its GPUs, software ecosystem, and new ideas, with a price objective of $185. Broadcom is making progress in custom AI chips and infrastructure software, with strong connections with hyperscale cloud providers, and a price objective of $315. Goldman believes the AI tale is not over, with the next act focused on making AI work, increasing the potential for Nvidia and Broadcom.

Wall Street is increasingly focusing on artificial intelligence (AI), and two prominent chipmakers have caught the attention of Goldman Sachs. The investment bank's analyst, James Schneider, has initiated coverage on Nvidia (NVDA) and Broadcom (AVGO) with Buy ratings, setting price targets of $185 and $315, respectively. Both stocks have already seen a significant increase of over 20% year-to-date, with Schneider expecting further upside [1].

Schneider highlights Nvidia's leadership in AI infrastructure, noting its expanding customer base, product leadership, and pace of innovation. The analyst sees Nvidia's valuation as attractive given the company's long-term prospects. For Broadcom, Schneider emphasizes its dominance in custom silicon and the strength of its infrastructure software business. He expects AI to contribute more than 40% of Broadcom's total revenue by 2026, backed by consistent profitability and sole-source relationships with hyperscalers [1].

In a separate note, Goldman Sachs has initiated coverage on Nebius Group (NASDAQ:NBIS) with a Buy rating, pointing to its position as a leading provider of AI infrastructure. The company operates in the AI Neocloud market, offering outsourced access to GPU computing power via the cloud. Analyst Alex Duval views Nebius as a direct beneficiary of rising demand for generative AI and the growing need for specialized GPU infrastructure. Nebius' full-stack software offering, cost efficiencies, and ability to operate at scale position it to serve the increasing number of enterprise and developer clients seeking access to AI compute without investing in their own hardware [2].

Meanwhile, Amazon Web Services (AWS) has unveiled new UltraServers designed to handle Nvidia's powerful GPUs for large-scale generative AI workloads. These servers feature custom cooling technology to manage the heat generated by dense GPU configurations, allowing AWS to offer advanced thermal support to customers [3].

Goldman Sachs' optimistic outlook on AI stocks reflects the next phase of AI investment, where the focus is on making AI work effectively. The investment bank believes that Nvidia and Broadcom, with their strong positions in AI infrastructure and software, are well-positioned to capitalize on this growth [1].

References:
[1] https://www.tipranks.com/news/goldman-sachs-picks-nvidia-nvda-and-broadcom-avgo-as-top-ai-stocks-to-buy
[2] https://finance.yahoo.com/news/goldman-sachs-starts-nebius-buy-100946163.html
[3] https://www.benzinga.com/markets/tech/25/07/46342110/amazon-unveils-powerful-new-ai-servers-to-support-nvidias-most-advanced-chips