Investing.com– Mizuho (NYSE:) analysts flagged a positive outlook for chipmakers in 2025, citing continued strength in artificial intelligence demand, data center and networking developments, and memory chips.
The investment bank said that strength on these fronts would help chipmakers weather headwinds from softer demand in the automobile industry, although demand from the sector could still improve in the second half of 2025.
Mizuho said Arm (NASDAQ:), Broadcom Inc (NASDAQ:), Credo Technology Group (NASDAQ:), Dell Technologies Inc (NYSE:), Micron Technology Inc (NASDAQ:), NVIDIA Corporation (NASDAQ:), and Western Digital Corporation (NASDAQ:) were its top picks among semiconductor stocks.
The investment bank said AI was likely to remain a key source of demand in 2025, especially for data center stocks and memory chip makers.
Investment in data centers is expected to increase further in the year, especially as AI hyperscalers flagged plans for increased capital expenditures on the sector.
For memory chip makers, demand for high-bandwith chips in AI applications is expected to persist, although this could be offset by softer prices in traditional memory chips due to muted demand for consumer electronics.
Still, Mizuho expects AI to help drive up handsets and PC sales in 2025, although the latter is only expected to improve in the second half of the year.
For analog chipmakers, Mizuho said cooling automobile demand is expected to be a major headwind, especially as electric vehicle sales slow across the globe.
Mizuho also flagged risks to its outlook from slower-than-expected AI spending and trade headwinds from U.S.-China tensions.
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