JPMorgan named the favorites for 2026 among chipmakers. Who made it to the top?

JPMorgan believes that the securities of the largest players in the semiconductor and networking industry retain the potential for outperformance in 2026. The bank's analysts named Broadcom as the main favorite for the next year. Also in their top were Marvell, Analog Devices and Micron.

A number of leading semiconductor and networking companies could outperform the market again in 2026, despite concerns about a bubble in artificial intelligence, according to JPMorgan, whose opinion is cited by MarketWatch. A team of analysts led by Harlan Ma estimates that business spending on data center capital expenditures could increase another 50% in 2026, after growing about 65% in 2025. This will support equipment manufacturers across the semiconductor industry value chain, MarketWatch predicts.

Sur named chipmaker Broadcom, memory chip maker Micron Technology, Marvell Technology, which develops semiconductors and solutions for storage, networking and data centers, and Analog Devices, which produces chips for industrial and automotive electronics, as the main favorites in the sector for next year. KLA, the only company in the chip manufacturing equipment segment, also made the list. And Synopsys, a developer of chip design software, was included in the list.

Suhr's team is also positive on shares of Nvidia, Lam Research, Cadence Design Systems, Applied Materials, Western Digital and Astera Labs, although they were not among the bank's top recommendations.

Broadcom, like Marvell, could benefit from the growing proliferation of specialized integrated circuits that compete with graphics processors in artificial intelligence tasks, according to analysts. Ma estimates that Broadcom's business of developing such AI processors, as well as its networking business, allows the company to expect AI revenue of $55-60 billion in fiscal 2026 and more than $100 billion in 2027. By comparison, that figure was about $20 billion in fiscal 2025, Barron's writes. JPMorgan's target price for Broadcom shares is $475, which implies a 28% upside from its Dec. 16 closing level.

Marvell, analysts believe, will enter the new calendar year with a "strong position" amid continued growth in the AI business and a recovery in cyclical businesses. In early December, the bank raised its target on the company's securities from $120 to $130 - a 55% increase from the last close.

Analog Devices is second in the high-performance analog electronics market, JPMorgan continues. Suhr notes that thanks to contracts obtained at the design stage, the company can earn from $500 to $600 million on artificial intelligence technologies as early as next year. The analyst expects capitalization growth of 15% for this player, follows a target price of $320 set in late November.

This year, Micron's securities have become one of the market leaders, adding over 170%. According to Suhr, next year could prove to be a strong year for the company as well. "We believe the stock still has significant upside potential in 2026, supported by price momentum and continued margin expansion," as well as the likelihood of an upward revision to its financial outlook, he wrote. As with the other three stocks on the list, JPMorgan maintains a buy recommendation on Micron's securities, with a $220 target set below current quotes.

Analysts say concerns about a bubble in AI are likely to persist as investment grows. However, in the longer term, they expect AI applications to expand in both the consumer and enterprise segments, as well as an increase in computing workloads, which will continue to support strong demand for accelerated computing and related infrastructure.

While its deployment in 2026 may be held back by supply chain constraints, the "positive," according to Suhr, is that the shortfall has the potential to extend the investment cycle in AI, "providing several years of growth that will directly benefit the semiconductor industry."

The JPMorgan team forecasts semiconductor industry revenue growth of 10-15% in 2026, with companies most closely associated with building infrastructure for artificial intelligence set to benefit the most, it said.

This article was AI-translated and verified by a human editor