Goldman Sachs has released a research report covering several U.S. companies in the digital semiconductor and electronic design automation (EDA) software sectors. The report highlights significant investment opportunities in commercial and custom chips and EDA suppliers amidst AI-related capital expenditures.
Analysts, led by James Schneider, have given a "buy" rating to four companies: Nvidia (NVDA, Financial) with a target price of $185, Broadcom (AVGO) at $315, Cadence Design Systems (CDNS) at $380, and Synopsys at $620. Meanwhile, they maintain a neutral rating for AMD (AMD) with a target price of $140, Arm (ARM) at $160, and Marvell Technology (MRVL) at $75.
The report emphasizes that AI infrastructure capital expenditure has surpassed $350 billion. Although profitability will take time, early signs of revenue growth and cost optimization support sustained investment. Analysts believe the AI investment cycle is at a transformative stage, with the semiconductor market and technology leadership rapidly evolving.
The demand for balancing advanced model training and cost-effective inference is driving a "barbell" investment strategy, focusing on performance and software ecosystem leaders, as well as cost-effective segment leaders. As the industry shifts from traditional client/server architectures to cloud computing and generative AI, the complexity and integration of multi-chip systems are increasing, boosting the value of EDA software.
