Nvidia and Broadcom Among Mizuho’s Top 2026 Semiconductor Picks

TLDR

• Mizuho names Nvidia, Lumentum, and Broadcom as top semiconductor picks for 2026 due to AI demand
• Microchip Technology and Lam Research identified as additional stocks to watch for the year
• AI-related chips and equipment expected to support sector growth, though gains may be smaller than 2025
• Strong demand continues for GPUs, custom AI chips, and faster networking speeds like 800G and 1.6T
• Firm remains cautious on autos, analog chips, PCs, and smartphones due to softer demand and high inventory

Mizuho has released its semiconductor sector outlook for 2026, naming three companies as its top stock picks for the year. The firm selected Nvidia, Lumentum, and Broadcom based on their positions in AI accelerators, optical networking, and advanced chip markets.

The investment firm expects AI-related chips and equipment to continue supporting the semiconductor sector in 2026. However, Mizuho noted that gains are likely to be smaller compared to 2025, when the SOX index rose 45 percent.

Analyst Vijay Rakesh stated that AI spending, wafer fabrication equipment, and memory cycles should drive strong performance in the first half of 2026. These trends are expected to support tier-one and sovereign AI server deployments.

AI Accelerators Lead Demand

Mizuho pointed to continued strength in GPU and custom AI chip demand as key factors supporting Nvidia and Broadcom. The firm said both companies are well positioned to benefit from increased hyperscaler capital expenditure, which is projected to reach approximately $540 billion in 2026, up 32 percent year over year.

NVIDIA Corporation, NVDA

Lumentum makes the list due to expected growth in faster AI networking speeds. The firm cited demand for 800G and 1.6T networking solutions as drivers for optical component suppliers.

Beyond its three primary picks, Mizuho identified Microchip Technology and Lam Research as additional stocks to watch in 2026. The firm highlighted their exposure to wafer fabrication and AI-related growth opportunities.

Memory Sector Shows Strength

Mizuho maintains a positive view on memory stocks for 2026. The firm expects strong pricing in DRAM and NAND products to benefit companies in the wafer fab equipment and memory segments.

The investment bank named Micron and SanDisk as companies likely to see gains from continued demand tied to AI data centers. This demand stems from the growing infrastructure needs of artificial intelligence applications.

Caution on Select Segments

The firm took a more cautious stance on certain semiconductor categories. Mizuho expressed concern about autos, analog chips, PCs, and smartphones due to softer demand patterns and elevated inventory levels across these markets.

Rakesh outlined several potential risks for the sector in his note to clients. These include potentially slower AI growth emerging in 2027, possible resumption of tariff and trade tensions with China, muted analog recovery, and high memory costs that could impact customer margins and demand.

Despite these concerns, Mizuho sees opportunities across AI, wafer fabrication equipment, optical components, and DRAM and NAND memory segments for 2026. The firm believes semiconductor valuations remain attractive when compared to the broader market, with AI-focused segments continuing to lead sector performance through the year.

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