D.A. Davidson opened formal coverage of four prominent semiconductor companies in client notes released Thursday, assigning Neutral ratings to three of the group and a Buy to one. The analyst initiating coverage, Gil Luria, emphasized differing competitive dynamics among the firms as AI-driven demand reshapes supplier economics.
Broadcom
The firm initiated Broadcom at Neutral with a $335 price target. In its note, D.A. Davidson warned that Broadcom is "sitting on a shrinking iceberg" as hyperscalers increasingly favour customised accelerators. The analyst cautioned that the largest customers could internalize more of their silicon stack over time, a shift that may "pressure supplier economics." D.A. Davidson concluded that Broadcom’s exposure to AI application-specific integrated circuits does not justify "a premium multiple versus market leaders such as NVIDIA."
Intel
Intel was also started at Neutral, with a $45 price target. The firm described Intel’s situation bluntly, saying it "wouldn’t be an overstatement to claim that Intel is attempting one of the hardest resets in semiconductor history." The note framed Intel’s task as twofold: rebuild leading-edge process capability and demonstrate credibility as a third-party foundry. While the analyst acknowledged "real developments" in Intel’s business, the note characterized the company as "the ultimate 'show me' story."
AMD
AMD received a Neutral rating alongside a $220 price target. D.A. Davidson described AMD as "a marginal AI accelerator player ... in the act of playing catch-up," even as it acknowledged the company’s strength in central processing units. The initiation indicates skepticism about AMD’s current standing in the AI accelerator market relative to peers.
TSMC
Taiwan Semiconductor Manufacturing Co. was the lone Buy in the coverage slate. Luria attributed the recommendation to TSMC’s leading-edge execution, which he called "a durable, self-reinforcing advantage" as AI compute demand expands. The analyst also highlighted "a compounding execution moat in leading edge manufacturing" and set a $450 price target for TSM.
The notes present a clear split: three suppliers began coverage with Neutral ratings reflecting execution risk or competitive pressure, while the foundry leader received a Buy rating grounded in manufacturing execution at the leading edge. The commentary underscores concerns around hyperscaler behaviour and supplier economics alongside an endorsement of TSMC’s manufacturing moat.