Nvidia’s post-earnings drop dented hopes for a fresh AI rally, but two firms could revive the trade this week.
The PHLX Semiconductor Index fell 7.2% after Nvidia’s results were met with tepid investor response.
BofA expects earnings from Broadcom and Marvell to possibly drum up fresh excitement on Wall Street.
Last week’s post-earnings sell-off in Nvidia shares dashed investor hopes of a revived artificial intelligence trade, but earnings for two AI names this week could generate fresh enthusiasm.
That’s according to Bank of America analyst Vivek Arya, who highlighted Broadcom and Marvell Technologies’ upcoming earnings reports as potential catalysts to watch, saying that they could «re-energize interest» in semiconductor names.
The PHLX Semiconductor Index dropped 7.2% last week after Nvidia’s fourth-quarter earnings report failed to meet Wall Street’s highest expectations.
Shares of the AI GPU maker entered a bear market correction last week, with the stock down 22% from its record high reached in early January.
But Arya says investors should get used to the volatility, as these types of declines are normal.
«While unwelcome, volatility is common in semi stocks and does not always presage a fundamental shift,» Arya said, adding that the semiconductor index has experienced 21 different 5% or more weekly declines since 2021 even as it cumulatively increased by 71%, significantly outperforming the S&P 500’s return of 59%.
Arya ultimately sees the latest volatility subsiding, as the fundamentals are too strong to ignore.
That dynamic could be on display on Wednesday and Thursday, when Marvell Technology and Broadcom are scheduled to report quarterly results.
Arya sees both companies, which are among his top five picks for 2025, beating analyst earnings estimates and raising their full-year guidance.
Arya’s conviction in the AI stocks stems from the sky-high capital expenditure commitments from cloud companies like Amazon, Microsoft, and Alphabet, most of which will be spent on AI-related hardware.
Additionally, Arya said the ongoing «battle of AI chatbots» benefits AI hardware makers, as it drives demand for training and inference chips, and as business models develop, should soothe investor fears about the return on high AI spending.
Here’s what Arya had to say about Broadcom and Marvell’s upcoming earnings reports.
Broadcom: «We expect management to restress the $60-$90 billion long-term SAM in custom chips and networking, with growing engagement with new partners (we think OpenAI, Apple).»
Marvell: «Recovery in telco, enterprise, and solid demand for AI chips by customer Amazon and continued growth in AI optics could drive upside to consensus. Separately we expect MRVL to grow with Amazon even in CY26 on continued participation in custom chip program.»
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