UBS Optimistic on 2024 Semiconductor Sector: Highlighting Wall Street's Preferred Picks

Entering 2024, Nvidia has shown an impressive performance, with its shares having risen by 14% as of Jan 16th. UBS analysts maintain that the rationale for investing in AI and affiliated firms will remain strong in 2024, with the potential for further reinforcement.

UBS has revised its industry revenue forecast upward, projecting a surge to US$420 billion by 2027. This equates to a 72% annual growth rate, marking a fifteenfold increase over five years. The enhanced forecast is attributed to a demand for AI that may surpass initial expectations and a more defined outlook on enterprise investment in AI infrastructure, in the context of an expanding appetite for AI-driven applications and models.

Meanwhile, the World Semiconductor Trade Statistics (WSTS) forecasts a robust 13.1% growth in the global semiconductor market for 2024, with expected revenues hitting US$588 billion. All regional markets are projected to continue their growth trajectory in 2024, with the Americas and Asia Pacific regions anticipated to show notable double-digit annual increases.

BofA names Nvidia as its top pick, citing its control in generative AI that could yield $100 billion more in free cash flow over two years.

Several analysts from UBS, BofA, Wolfe Research, KeyBanc Capital Markets and Mizuho named Micron as one of their top picks.

Below are the preferred semiconductor stocks by Wall Street analysts for 2024.