Barclays is bullish on these companies to lead the AI chip industry in 2025, not just NVIDIA (NVDA.US).
1min read Barclays predicts that by 2025, Marvell Technology (MRVL.US) and Nvidia (NVDA.US) will be the leaders in the AI semiconductor space. Broadcom (AVGO.US), Credo Technology (CRDO.US) and undervalued Lumentum Holdings (LITE.US) are also seen favorably.Analysts led by Tom O'Malley at Barclays said: "Nvidia's GPU sales are expected to reach nearly $100bn in 2024, and we expect it to grow to ~$160bn in 2025. Custom chips are just starting to become increasingly important and will grow at a faster compound annual growth rate (55%) over the next 3 years. We believe the size of the AI TAM is large enough to support these companies through 2026."Barclays raised its price target on Broadcom to $260 from $205; raised its price target on Marvell Technology to $150 from $115; and raised its rating on Lumentum to "Overweight" from "Underweight" with a price target of $125.O'Malley noted: "We are skeptical of Lumentum Holdings' ability to expand its module business above $10bn, but the increase in port count, along with the strong desire to use the US supply chain, is driving hyperscale manufacturers to qualify at an astonishing pace."While Nvidia is the clear leader in the AI semiconductor space, the high demand should open the door for other semiconductor companies.O'Malley said: "We never underestimate Nvidia's leadership in the commercial and high-end AI compute market, but customers continue to demand second source options and more cost-effective ways to provide latency intensive AI inference services to billions of potential users. We believe this transition will translate into ~$21bn flowing to Broadcom's custom chips in fiscal 2026, and ~$4bn flowing to Marvell Technology in fiscal 2026. We expect this transition to expand to support our identified $10bn total asset size by the end of this decade."
