Wells Fargo’s Rakers Says Semiconductor Industry To Boom To $1T In Revenue In 2026: AMD, AVGO Stocks In Focus

• In a CNBC TV interview, Rakers said that a movement from a heavy AI training investment cycle to inferencing has been benefitting the chip sector.
• Rakers said that Taiwan Semiconductor Manufacturing Corporation’s robust quarterly results indicated a broad-based strength in the AI semiconductor industry. 
• He added that AMD was Wells Fargo’s top pick and it had an ‘Overweight’ rating on AVGO.

Wells Fargo’s senior equity analyst Aaron Rakers predicts the semiconductor industry will grow to one trillion dollars in revenue in 2026, up 29% year-on-year. The analyst forecasted double-digit growth for 2027.

“I think we’re still seeing that we’re moving from a heavy AI training investment cycle to inferencing starting to proliferate, and that’s carrying the chip sector,” said Rakers, in an interview with CNBC TV.

Rakers also reiterated the firm’s bullish stance on certain semiconductor heavyweights like Advanced Micro Devices (AMD), Nvidia Corp. (NVDA), and Broadcom Inc. (AVGO).

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Rakers said that Taiwan Semiconductor Manufacturing Corporation’s (TSM) robust quarterly results indicated a broad-based strength in the AI semiconductor industry. He added that AMD was the firm’s top pick while it held an ‘Overweight’ rating on AVGO.

Rakers said that Broadcom had underperformed since its earnings report in December 2025. However, as per the analyst, the company trades at a low 20 multiple on its updated calendar 2027 EPS estimate.

“We want to be involved in this name as they diversify their custom AI base of business as we move forward,” he said. “Obviously, a lot of that today is driven by Google’s TPU, but you’ve got opportunities with Anthropic, OpenAI, Meta, and others coming into the story as we move through 2026.”

Talking of Nvidia, Rakers reiterated that the firm has been consistently overweight on the company. “I think they’re going to have a good print this next cycle. We came out of a meeting with the company last week at CES, and demand sounds very, very robust,” he said in the interview.

“We think that they are playing a different ballgame. This notion of extreme co-design up and down the stack makes them a clear, differentiated platform provider, so we continue to like that name as well,” he added.

Rakers ruled out China as a big risk for Nvidia. Speaking of President Trump’s new rule that would permit Nvidia to sell its H200 chips to China, he said the firm estimated it could add $25 billion to $30 billion of incremental revenue for the company over time.

The analyst also named Micron Technology Inc. (MU) as one of the other noteworthy players in the industry, citing the intensity around memory.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around AMD stock remained in the ‘extremely bullish’ territory over the past 24 hours amid ‘high’ message levels. Retail sentiment around NVDA stock remained in ‘bullish’ territory over the past 24 hours amid ‘normal’ message levels.

Meanwhile, retail sentiment around AVGO stock slipped to ‘bearish’ from ‘neutral’ territory over the past day amid ‘low’ message volumes.

Shares of AMD have gained over 90% in the past year. Meanwhile, shares of NVDA have climbed over 37% and AVGO shares have risen over 50% in the same time.

The iShares Semiconductor ETF (SOXX), which tracks U.S.-listed semiconductor stocks have climbed over 51% in the last 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.
 

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