AMD, Broadcom, Arm AI chip bull run

What happened: Shares of AMD and Arm have recently dropped by 17% and 27% respectively, yet both maintain 'BUY' ratings with significant price target upside (28% and 18%). Broadcom stands out with a strong risk-adjusted case, boasting a forward P/E of 20, 49% operating margin, and a PEG of 0.43. AMD's Data Center revenue surged 57% YoY, driving a base-case projection of $7,657 from a $5,000 investment by 2031. Meanwhile, AI-focused companies like Astera and Arista have seen significant growth, with potential for further gains as AI workloads increase.

Market impact: The AI chip bull run is affecting semiconductor stocks, with AMD, Arm, and Broadcom leading the way. The growth in AI workloads is driving demand for specialized connectivity and networking solutions, benefiting companies like Astera and Arista. AMD's strong performance in data centers is pushing its stock price higher, while export controls are impacting its inventory charges.

What to watch next: AMD's next earnings report (scheduled for Q2 2023) will provide insights into its data center growth and the impact of export controls. Additionally, investors should monitor the progress of AI-focused companies Astera and Arista, as their performance will indicate the strength of the AI chip trend. Lastly, regulatory developments around export controls will determine their potential impact on AMD's inventory charges.