Investing.com -- Seaport Research started coverage of the semiconductor sector with a cautious view, downgrading Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) to Sell while rating buy on stocks like Broadcom (NASDAQ:AVGO) and AMD (NASDAQ:AMD).
While artificial intelligence is transforming the industry, Seaport said it’s still early days and many companies face growing pains as customers demand clearer returns on large investments.
Nvidia, long the face of the AI boom, is now fully priced in, according to the firm.
Seaport warned of cooling demand next year and mounting pressure from customers building their own chips.
It set a $100 price target for the stock, far below current levels.
Broadcom, on the other hand, was initiated with a "Buy" rating and a $230 target.
The firm praised Broadcom’s behind-the-scenes role in powering AI, especially as it helps tech giants develop custom silicon.
Its software push and strong customer base, including Google (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL), also impressed analysts.
AMD earned a "Buy" as well, with Seaport citing the company’s steady execution and gains against Intel in PCs and data centers.
While AMD’s AI business is still small, the firm believes it is building in the right direction.
Intel, meanwhile, is facing “a long year,” with no clear AI strategy and massive investments needed to catch up in manufacturing.
Seaport set an $18 target and noted deep internal restructuring could add instability.
Texas Instruments (NASDAQ:TXN) and Analog Devices (NASDAQ:ADI) were also rated "Sell," with analysts warning that weak industrial demand and growing competition from China could prolong the downturn in analog chips.