UBS identified Micron and Broadcom as attractive AI semiconductor stocks following a sector correction since June 22. The investment bank stated that fundamentals have strengthened despite share price declines, using its proprietary valuation model to select companies with improving cash flow yields. UBS highlighted that AI-related semiconductor stocks experienced significant adjustments after June 22, but underlying business performance continues to exceed market expectations across memory and custom chip segments.
UBS recommended nine technology stocks including Micron, Broadcom, AMD, Dell Technologies, Hewlett Packard Enterprise (HPE), Lam Research, SanDisk, Seagate, and Western Digital based on cash flow improvement potential despite recent price declines.
Micron Reports 346% Revenue Growth in Fiscal Q3
UBS identified Micron as one of the most promising stocks despite a 30% share price decline since June 22. Micron's fiscal third quarter revenue ending in late May reached $41.46 billion, compared to $9.3 billion in the same period last year.
Micron CEO Sanjay Mehrotra stated: "We are making the largest investments in our history in technology, products, and production capacity to meet customers' surging AI demand." Micron is expanding long-term supply contracts centered on AI and automotive sectors. This month, the company agreed to collaborate with Ford to supply next-generation vehicle memory and storage.
Broadcom AI Semiconductor Revenue Reaches $10.8 Billion
UBS assessed that Broadcom maintained a more resilient trajectory than other semiconductor companies. Broadcom's share price declined only approximately 5% during the recent correction period. The company's fiscal second quarter AI semiconductor revenue reached $10.8 billion, a 143% year-over-year increase driven by custom AI accelerator and AI networking equipment demand.
Broadcom CEO Hock Tan stated: "Third quarter AI semiconductor revenue is expected to reach $16 billion, an increase of more than 200% year-over-year." Broadcom expanded its multi-year collaboration with Meta this year to develop next-generation custom AI accelerators.
AMD Datacenter Segment Grows 57% Year-Over-Year
UBS diagnosed that AMD's fundamentals remain solid despite a recent 10% correction. AMD's first quarter datacenter segment revenue reached $5.8 billion, a 57% year-over-year increase driven by strong sales of EPYC server processors and Instinct AI GPUs.
FAQ
What stocks did UBS recommend after the semiconductor correction since June 22?
UBS recommended nine technology stocks: Micron, Broadcom, AMD, Dell Technologies, Hewlett Packard Enterprise (HPE), Lam Research, SanDisk, Seagate, and Western Digital. The investment bank selected these companies based on improving cash flow yields despite recent share price declines.
How much did Micron's fiscal Q3 revenue grow compared to last year?
Micron's fiscal third quarter revenue ending in late May reached $41.46 billion, compared to $9.3 billion in the same period last year—a 346% increase. CEO Sanjay Mehrotra attributed the growth to investments in technology, products, and production capacity to meet surging AI demand.
What is Broadcom's AI semiconductor revenue forecast for fiscal Q3?
Broadcom CEO Hock Tan stated that third quarter AI semiconductor revenue is expected to reach $16 billion, representing a year-over-year increase of more than 200%. The company's fiscal second quarter AI semiconductor revenue was $10.8 billion, a 143% year-over-year increase.
