On the eve of earnings reports, Oppenheimer reiterated that Nvidia (NVDA.US) and Broadcom (AVGO.US) preferred tariffs for the semiconductor sector are expected to encourage companies to make early purchases

On the eve of earnings season, investment bank Oppenheimer reiterated that it listed Nvidia (NVDA.US), Broadcom (AVGO.US), MRVL.US (MRVL.US), and Monolithic Power Systems (MPWR.US) as the preferred recommendations for the semiconductor sector.

Analyst Rick Schafer wrote in his report to clients, “In the context of the turbulent macroeconomic environment and tariffs, we believe artificial intelligence is the best and safest growth direction,” and “most companies may exceed expectations due to early procurement due to tariffs.” We expect management's outlook to be conservative due to trade war uncertainty and general lack of visibility. At least in the short term, we're seeing limited direct impact on AI related spending.”

In-depth analysis shows that Schafer expects Nvidia to sell around 40,000 equivalent NVL72 systems despite a “slow” start to the quarter. Meanwhile, capital expenditure for cloud service providers is still expected to increase by 40% in 2025.

Although semiconductors (most categories) are currently exempt from the Trump administration's tariff policy, market rumors suggest that tariff measures targeting specific industries are still being prepared, which may have a negative impact.

“We are seeing price increases associated with tariffs, which have had the most significant impact on terminal demand for consumer electronics products such as PCs/smartphones,” Schafer added.

In view of recent market fluctuations, Schafer lowered target prices for Adderall Semiconductors (ADI.US), Maywell Technology, Monolithic Power, NXP Semiconductors (NXPI .US), and VECO.US (VECO.US) to “reflect the compression of valuation multiples.”