Wells Fargo upgrades key chip names; AMD a top pick

Investing.com -- Wells Fargo issued a broad wave of semiconductor upgrades as part of its 2026 outlook, arguing that the sector remains positioned for further gains despite strong year-to-date performance.

The firm highlighted AI demand indicators, a token-driven supply and demand model, and wafer-fab-equipment (WFE) forecasts as central inputs.

Wells Fargo named AMD its top pick, citing an “expanding multi-GW MI450X pipeline, server CPU share gains, & embedded recovery.”

The firm also upgraded Broadcom to Overweight with a $430 price target, saying concerns around gross margins are “overdone” and pointing to “Google TPU upside + significant additional custom XPU ramps.”

Wells Fargo also maintained a positive view on what it called the “memory super-cycle,” noting Micron is on track to “+$40/sh EPS,” while SanDisk is projected to move “to >$30/sh EPS.”

In semiconductor capital equipment, Applied Materials remains the firm’s “top semi cap pick in 2026,” but Wells Fargo also upgraded Lam Research and KLA to Overweight.

Despite the group being “a consensus long,” the firm said that for AMAT, tightening supply-demand dynamics support “a WFE acceleration in 2027,” prompting it to raise estimates by an average of 10 percent.

Analog names received similar treatment, with upgrades to Overweight for Analog Devices and Monolithic Power Systems. Wells Fargo said sentiment is improving given “relatively easy y/y comps” and the potential for inventory replenishment.

The bank now forecasts 2026 semiconductor revenue of $1.02 trillion, up 29 percent year over year, with AI infrastructure expected to drive massive long-term investment.

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