Here's What Made Needham Bullish On Nvidia, AMD Versus Others In Semiconductor Space

Needham shifted its focus on NVIDIA Corp NVDA and Advanced Micro Devices Inc AMD.
The stocks exhibited strong secular trends and more muted cyclical exposure, with more attractive valuations amid slowing consumer demand and supply constraints.
Needham noted NVIDIA has multiple secular drivers to help buffer them against near-term cycle dynamics.
Needham specifed five distinct product cycles over the next year: Hopper, software, gaming, auto, and Grace.
In the near term, its supply chain checks indicate that demand from NVDA continues to be strong, with the company prioritizing mix toward higher-value server and datacenter platforms, with PC/graphics a lower priority amid ongoing tight supply conditions.
As noted in Needham's Asia supply chain report, the supply chain is expecting a 40-series GeForce platform launch in the fall.
AMD's recent concern has been client PC industry demand.
Needham has strong confidence regarding AMD's share gains in the data center space, both in the enterprise and the cloud market.
Further, Genoa could widen the gap between AMD and Intel Corp INTC.
Qualcomm Inc QCOM saw bleaker June quarter revenue q/q due to the absence of product launches, while September revenue would be up strongly q/q driven by a resumption of product launches.
Checks on iPhones suggest demand has been stable.
QCOM appears to be more insulated from China's smartphone weakness due to its Apple Inc AAPL iPhone exposure, with the supply chain expecting their QCOM business to be up q/q in 2Q.
While there has been some investor concern regarding a decline in mmWave content in iPhone 14, Needham's checks have also suggested stable mmWave content on iPhone 14.
QCOM's non-handset catalysts, the first of which is notebook content, will be more robust in CY23.
Needham has a Strong Buy rating on NVDA and QCOM with Outperform rating on AMD.
Price Action: NVDA shares traded higher by 0.07% at $212.73 on the last check Monday.

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