Bank of America continues to back Nvidia (NVDA, Financial), Broadcom (AVGO, Financial), Lam Research (LRCX, Financial), and Cadence Design Systems (CDNS, Financial) as its preferred semiconductor stocks following the Trump administration's rollout of new global tariffs.

Analysts led by Vivek Arya noted that while semiconductor components were excluded from the tariff list, the end-products they power — including smartphones, servers, and PCs — are expected to be directly affected. In response, the Philadelphia Semiconductor Index fell 10% compared to a 5% drop in the broader S&P 500 Index.

Firms with domestic manufacturing like Texas Instruments (TXN, Financial), Intel (INTC, Financial), GlobalFoundries (GFS, Financial), and Wolfspeed (WOLF, Financial) fared better, as did companies with significant pricing power such as Nvidia and Arm (ARM, Financial). Electronic design automation leaders Cadence and Synopsys (SNPS, Financial) also remained relatively stable.

By contrast, those with higher offshore production exposure, including Coherent (COHR, Financial), Lumentum (LITE, Financial), and Credo Technology (CRDO, Financial), underperformed. Firms carrying more debt, like MKS Instruments (MKSI, Financial) and Microchip Technology (MCHP, Financial), also lagged.

BofA expects the AI infrastructure cycle to maintain momentum, particularly among major U.S. cloud providers, who have the capacity to sustain higher costs for mission-critical deployments. In this environment, companies with robust financials and ties to AI, cloud, or chip complexity are projected to remain resilient.

Separately, Arya's team cited media reports suggesting Intel has preliminarily agreed to a joint venture with Taiwan Semiconductor Manufacturing (TSM, Financial) to manage parts of its production. Under the proposed structure, TSM would own 20% of the new venture, with Intel and other U.S.-based fabless firms holding the majority.

However, the analysts flagged several uncertainties, including the strategic rationale for the partnership, potential overlap in manufacturing roadmaps, and whether such a venture aligns with CHIPS Act funding and return-on-investment expectations from co-investors such as Apollo and Brookfield.