Nvidia’s earnings blockbuster has gotten investors excited . The stock soared more than 29% in extended trading after the May 24 results — building on the already huge returns it got from the artificial intelligence buzz this year. Since Wednesday, it’s been up 27%. In a May 25 note, BofA said Nvidia’s “rosy outlook” when it comes to data centers and AI has reaffirmed its positive view on the AI server hardware supply chain. The bank noted that several AI-server related stocks in Taiwan surged after Nvidia’s strong results. “Still, we view AI server as one of the most solid/visible drivers for Greater China hardware tech supply-chain,” BofA analysts wrote. They expect that “highly customized” design and specifications and stronger computing power of AI servers will boost the value and selling prices of hardware suppliers from 2024. Stock picks BofA is sticking to its “buy” ratings on these three Taiwanese tech stocks. Delta Electronics : BofA noted there’s still upside for the electronics manufacturer if demand for servers or data centers is stronger than expected, or if electric vehicle-related launches by global brands come faster than anticipated. The bank gave Delta a price target of 365 Taiwanese dollars ($11.90), or about 15% potential upside. Lite-On Tech : BofA is bullish on shares of this electronic components supplier, which produces parts for the semiconductor industry, among other products. That’s because of rising AI server demand, its increasing sales mix from cloud and the “artificial intelligence of things” trend. It added that the firm has a “solid” balance sheet and consistently high cash dividend payout at over 70% since 2011. The bank gave Lite-On Tech a price target of 95 Taiwanese dollars, or about 10% potential upside. Quanta Computer : BofA said Quanta, which manufactures hardware but has extended its reach to AI applications and cloud computing, now has a better product mix and improving margins. It also has a high cash yield at 7%. It gave Quanta a price target of 125 Taiwanese dollars, or about 10% potential upside. — CNBC’s Michael Bloom contributed to this report.
