BofA says AI demand broadens across semiconductor sector

Investing.com -- Bank of America hosted 37 semiconductor management teams at its 2026 Tech Conference, with executives reporting strong demand across AI compute, networking and semiconductor capital equipment sectors.

Supply in these areas is growing rapidly but remains unable to meet demand levels, according to the bank's assessment from the conference. Companies reported high demand and order visibility, with analog chipmakers seeing cyclical recovery expand alongside AI-related growth.

Bank of America identified NASDAQ:NVDA, NASDAQ:CRDO, NASDAQ:ADI, NASDAQ:TXN, NASDAQ:KLAC and NASDAQ:MCHP as focus stocks with strong growth potential that have underperformed the SOX index year-to-date.

In software, AI remained the primary growth driver across cloud infrastructure, software platforms and cybersecurity. CoreWeave and Nebius reported strong visibility and enterprise adoption, focusing on capacity scaling and inference workloads.

Atlassian, Datadog and MongoDB cited momentum in cross-selling products and AI-driven consumption trends. Salesforce described AI as a net expansion opportunity, while ServiceNow pointed to sustained demand supported by early return on investment.

Networking vendors reported robust AI-driven data center demand led by hyperscaler buildouts. Arista noted sustained investment across multiple network architectures as customers prioritize utilization. AI Ethernet deployments are moving from pilot programs into production.

Extreme Networks reported steady market share gains amid competitive disruptions with Cisco and HPE/Juniper. Motorola highlighted sustained demand in public safety networks with strong order visibility and growing software attachment.

In IT hardware, Dell and HPE both pointed to strong traditional server demand driven by inference and agentic AI applications. Storage emerged as an increasingly strategic component as AI increases data storage requirements, supporting HDD manufacturers Seagate and Western Digital.

Supply of NAND flash memory, hard disk drives and CPUs continues to tighten, pushing prices higher across IT hardware. This dynamic creates margin pressure for some original equipment manufacturers but benefits companies with scale and supply access.

You May Also Be Interested In

• Trump: My Preference Has Always Been Take Kharg Island
• Auddia receives SEC comments on merger filing, expects July closing
• BrandPilot AI signs partnership with Epitaph Group media agency