Piper Sandler Flags AI Chip Upside Across Five Key Semiconductors

Piper Sandler analysts David O'Connor and Zackary Altman have initiated coverage on Nvidia, Broadcom, Arm Holdings, AMD, and Marvell, assigning overweight ratings to all five names. The firm forecasts a 19% to 37% upside for these companies, driven by what they describe as a critical shortage of AI compute capacity. According to the report, distributed via GN stocks/nasdaq, the global compute market is expected to expand fivefold to reach $2.2 trillion by 2030, with approximately $2 trillion allocated specifically to AI chips.

The valuation thesis relies on sustained demand outpacing supply. O'Connor and Altman note that hourly pricing for Nvidia’s H100 GPUs has risen 30% to $2.60 since December, while current AI chip inventories are largely sold out for the coming year. Order books are already filled for 2028, indicating that pricing power remains with suppliers rather than buyers in the near term.

Nvidia and Broadcom Lead Revenue Growth

Nvidia, holding roughly 80% market share in AI compute, received the highest price target of $300, implying 37% upside. The firm highlights the company’s CUDA software moat and its strategic position in inference through recent acquisitions. Broadcom, with a $460 target representing 27% upside, is seen as the cheapest of the group at 19 times forward earnings. The company holds a 75% share of the ASIC market for inference, where demand currently runs at double the available supply.

Broadcom projects a 400% surge in AI revenue to reach $230 billion by fiscal 2028. This growth is attributed to its dual leadership in custom silicon and networking infrastructure. The firm contrasts this with the broader market dynamic, where the scarcity of specialized hardware allows established players to maintain premium pricing despite intensifying competition from new entrants.

Arm and AMD Target Agentic AI Shifts

Arm Holdings, with a $320 price target or 26% upside, is positioned to benefit from its intellectual property licensing model and its new entry into physical chip manufacturing. However, the stock trades at a premium valuation of 114 times forward earnings. AMD, targeted at $600 for 19% upside, is viewed as a primary beneficiary of the shift toward agentic AI, which drives increased demand for central processing units alongside graphics processing units.

AMD is actively capturing market share from Intel in the server CPU segment while leveraging its GPU portfolio for inference workloads. The firm argues that the convergence of CPU and AI accelerator demand creates a favorable environment for AMD to expand its addressable market, particularly as enterprise workloads become more complex and multi-modal.

Marvell Benefits From Custom Chip Demand

Marvell Technology is described as well-positioned in the custom chip and optical networking sectors. While specific pricing targets were detailed for the other four firms, Marvell’s inclusion in the overweight group underscores the firm’s view that the entire AI semiconductor supply chain is experiencing structural demand growth. The report emphasizes that the expansion of data center infrastructure will drive sustained revenue growth across these specialized hardware providers through 2030.