JPMorgan Overhauls AI Stock Picks, Backs Nvidia, Broadcom, and Micron as Top Plays

Amid market turbulence and on the eve of a pivotal earnings season, JPMorgan has significantly revised its list of favored artificial intelligence (AI) stocks. In a move underscoring a strategic shift toward selectivity, the Wall Street giant has positioned Nvidia (NVDA), Broadcom (AVGO), and Micron Technology (MU) at the top of its buy list.

This recalibration follows a sharp market sell-off on Tuesday, which saw the S&P 500 plunge 2.06%, the Nasdaq Composite tumble 2.39%, and the Dow Jones Industrial Average fall 1.76—erasing nearly $1.2 trillion in value from the S&P 500 alone. Despite soaring valuations across the AI sector, JPMorgan maintains that expectations for the upcoming quarter and beyond remain “mostly constructive.”

The bank asserts that the AI investment thesis remains intact but is “clearly entering a more selective phase.” The era of broad, outsized gains is giving way to a period requiring more discerning stock picking, making its updated list particularly critical for investors navigating a high-stakes earnings season.

Core Picks: Betting on AI Infrastructure “Hardware”

JPMorgan’s revamped “AI chip stocks to buy” list emphasizes core infrastructure providers, featuring several standout small-cap names. The leading trio represents distinct strategic plays:

• Nvidia: The “Linchpin” of the AI Trade. Dominating an estimated 80-90% of the AI accelerator market, Nvidia’s data center supremacy and unrelenting demand from hyperscalers cement its anchor position. Its CUDA software, networking, and systems ecosystem create significant customer lock-in. While in the midst of its Blackwell platform ramp, its next-generation Vera Rubin platform is already billed to dramatically slash inference costs.
• Broadcom: The Custom AI and Networking “Quiet Compounder.” Instead of flashy GPUs, Broadcom provides the essential “plumbing” for massive AI systems. It designs custom chips for hyperscalers and supplies the networking gear that connects GPU clusters. The company commands an estimated 55-60% share of the custom chip niche. CEO Hock Tan recently highlighted that AI chip sales—surging 74% year-over-year—are driving record revenue, a trend expected to continue.
• Micron: The AI-Driven “Picks-and-Shovels” Memory Story. Its stock has soared 77% in just three months, fueled by a severe supply-demand imbalance. AI data centers’ insatiable need for high-bandwidth memory (HBM) has led Micron to warn it can only fulfill about half to two-thirds of demand from key customers medium-term. CEO Sanjay Mehrotra believes this tightness cannot be resolved overnight.

The expanded list also includes Marvell Technology (MRVL) (linked to AI networking), Analog Devices (ADI) (power management), KLA Corp (KLAC) (advanced chipmaking equipment), and Synopsys (SNPS) (critical chip design software). Among small-caps, JPMorgan favors MACOM Technology Solutions (MTSI) and Astera Labs (ALAB), a newcomer riding the data center expansion wave.

Sector Outlook: Rally Has “Legs,” But Risks Loom

Analysts, led by Harlan Sur, believe the semiconductor rally still has “legs.” They project a scenario where robust execution, solid demand, and constructive guidance will sustain momentum this year. The bank sees “considerable upside” in the AI accelerator space, forecasting a stellar 50% compound annual growth rate backed by over $200 billion in spending in 2025.

However, optimism is tempered with caution. JPMorgan warns that relentlessly rising memory prices, while beneficial for Micron, will continue to pressure PC and smartphone demand later this year. As earnings season unfolds, JPMorgan’s selective blueprint offers investors a focused roadmap to the core of the AI rally amidst ongoing market volatility.

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