Bank of America Flags Nvidia, AMD, Broadcom as Undervalued Compute Plays
Bank of America's semiconductor analysis reveals a bifurcated market. While some chip stocks appear overextended, compute-focused names like Nvidia, AMD, Broadcom, and Credo Technology Group trade at compelling valuations—24 times 2027 earnings with a 0.5 PEG ratio.
The quartet is projected to deliver 42% sales growth and 49% adjusted earnings expansion through 2027. This comes as cloud spending accelerates—BofA's tracker shows 38% YoY growth in 2026, potentially reaching 50% by year-end.
Analyst Vivek Arya notes these stocks historically traded at premium multiples during similar growth phases. The current discount emerges despite hyperscalers' unabated infrastructure investments, which continue to drive double-digit revenue growth across the compute stack.
