Analysts Dismiss AI Bubble Fears, Boost Tech Stock Targets

As arguments intensify that stocks are in an AI-driven bubble, fundamental analysis from major financial institutions counters this narrative with continued optimism. Despite broader market concerns including the Trump administration’s ongoing trade war, the federal government shutdown, and regional banks disclosing issues with bad and fraudulent loans, analysts maintain strong buy ratings across key semiconductor companies. The persistent bullish sentiment comes as markets attempt to shrug off these macroeconomic worries, with institutional investors focusing instead on the long-term potential of artificial intelligence infrastructure.

Multiple firms have recently reinforced their positive outlook on chipmaker stocks, with Bank of America, Jefferies, and Barclays all issuing upgraded assessments. This coordinated analyst optimism appears to directly challenge the bubble narrative, instead positioning current AI investments as sustainable capital expenditures rather than speculative excess. The divergence in views highlights the ongoing debate about whether current valuations reflect genuine technological transformation or market euphoria that could end in a significant correction.

Bank of America recently reiterated its “Buy” rating on NVIDIA (NVDA), emphasizing the company’s strong positioning in healthcare and artificial intelligence markets. “Nvidia, a leader in accelerated computing, has broadened its reach into high-compute healthcare workloads and continues to engage in partnerships on the application side,” the firm noted, highlighting NVDA’s expanding market opportunities beyond traditional computing applications.

Jefferies similarly maintained its “Buy” rating on NVIDIA, offering particularly insightful commentary about the company’s competitive position. “One of the clear takeaways from the conference is that the entire ecosystem is chasing NVDA. We are seeing everyone chasing the scale-up opportunity at a multiyear disadvantage vs NVDA,” the firm observed, suggesting that NVIDIA has established such a significant technological lead that competitors face substantial challenges in catching up. This ecosystem dominance represents a key factor in analyst confidence, as it creates significant barriers to entry and sustainable competitive advantages.

Barclays recently raised its price target on Taiwan Semiconductor (TSM) to $275 while maintaining an “Overweight” rating, following the company’s impressive quarterly results and guidance. The upgrade came after TSM raised its 2025 revenue guidance to mid-30% growth and reiterated plans to invest $42 billion in capital expenditures by year’s end. The chip manufacturer also posted a substantial 39.1% jump in third-quarter profits, demonstrating strong operational performance amid growing demand for advanced semiconductors.

Bank of America also reiterated its “Buy” rating on Advanced Micro Devices (AMD) with a $300 price target, citing the company’s position in a “multi-hundred billion addressable market opportunity in PC, server, high-end gaming, deep-learning, and related markets where AMD has less than 30% value share currently.” This assessment suggests significant growth potential remains as AMD continues to capture market share across multiple computing segments, with artificial intelligence representing a particularly promising growth vector given the company’s expanding product portfolio.

Goldman Sachs has emerged as a prominent voice countering bubble concerns, with economist Joseph Briggs making the case for sustainable AI investment in a note titled ‘AI Spending Is Not Too Big.’ The financial services company argued that “the billions being spent on building out data centers — known as capital expenditures, or ‘capex’ — remains sustainable,” directly addressing concerns about potential overinvestment in AI infrastructure.

According to Goldman Sachs analysis quoted by Quartz.com, “The financial services company, in a note to investors this week, said that it believes the AI story is just getting started — and the investments that seem huge today will be dwarfed by the benefits AI will deliver.” The investment bank projects that long-term AI adoption could add $20 trillion to the U.S. economy, with the technology “already delivering those gains in productivity when deployed right.” This perspective positions current spending as foundational investment rather than speculative excess, suggesting that the true economic impact of AI may significantly outweigh current expenditure levels.