Investing.com -- Bank of America highlighted 3 names as its top picks in the analog semiconductor space on Friday, raising price targets on two of the three and arguing that the market continues to underappreciate the content gains tied to the shift to 800-volt data center architecture.

Texas Instruments, Analog Devices and ON Semiconductor are the stocks in question.

In a note from analyst Vivek Arya, BofA said core industrial and automotive markets have "finally turned the corner, going from headwinds during the inventory correction to cyclical tailwinds," while transformative growth in AI data centers is redefining the long-term growth profile for the subsector.

Despite recent sharp rallies, with Texas Instruments up 59%, Analog Devices up 25% and ON Semiconductor up 88% quarter-to-date, BofA said "potential content gains could be underappreciated in Street estimates."

On Texas Instruments, BofA raised its price target to $370 from $320, estimating the company's data center business could reach approximately $4.5 billion by 2028, or up to 18% of total sales, as multi-phase voltage regulators and gallium nitride sockets come online with the 800-volt transition.

For Analog Devices, BofA said total AI exposure is running at $2 billion annually, with AI sales excluding test and measurement equipment potentially reaching $3.3 billion by 2028.

“The acquisition of Empower enhances ADI’s chances to win coveted vertical power delivery sockets LT, especially as the industry moves to integrated voltage regulators,” Arya wrote.

ON Semiconductor was described as "a potentially high leverage way to gain exposure to AI power," with BofA estimating AI sales could grow more than six times to $1.6 billion by 2028. BofA raised its price objective on ON to $138 from $115.