2025 AI Chip Surge: Nvidia & Semiconductor Stocks Climb with $1T AI Boom

Wedbush analysts emphasize that the explosive tech bull run powered by the 'AI tidal wave' is just beginning.

Key Highlights

• Nvidia, AMD, Broadcom, and other semiconductor stocks surged on Friday, recovering from earlier declines amid growing AI demand.
• Despite Friday's gains, many chip stocks remain below their early July levels due to recent market volatility.
• July posed challenges for chip stocks amid fears of trade restrictions and investor rotation toward small-cap stocks anticipating Federal Reserve rate cuts.

Shares of Nvidia (NVDA), Advanced Micro Devices (AMD), Broadcom (AVGO), and other semiconductor leaders rebounded on Friday as analysts predict the current spike driven by AI needs is far from over.

The iShares Semiconductor ETF (SOXX) climbed more than 2% in afternoon trading, recovering from prior losses yet still down roughly 7% since July began after a tough few weeks for chip equities.

Challenges Facing Chip Stocks in July

Semiconductor equities faced pressure due to concerns over escalating trade restrictions and a shift by investors into small-cap stocks, which are seen as potential beneficiaries of upcoming Federal Reserve rate cuts.

Recent government data showed inflation easing in June, bolstering expectations for a rate cut as soon as September, following encouraging economic signals earlier in the month.

Nonetheless, analysts believe the dip in chip stocks may be temporary as the strong fundamentals and soaring AI-related demand support a market rebound.

Beginning of a New Tech Bull Run Driven by AI

Wedbush analysts stated, “This marks the start—not the end—of a tech bull run propelled by a wave of AI investment.”

They forecast that combined corporate and government spending could surpass $1 trillion in the coming years, fueling the ongoing 'AI Revolution.'

Bank of America analysts highlight that chipmakers heavily tied to AI and data center markets, like Nvidia and Broadcom, stand to gain the most from this surge in AI expenditures.

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