Bank of America (BofA) analysts see the recent selloff in AI stocks as a buying opportunity, reaffirming their confidence in NVIDIA (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and Marvell Technology (NASDAQ: MRVL).
In a research note on Wednesday, BofA dismissed concerns that DeepSeek’s new tech would shake up the AI market in a big way. They described it as a natural evolution in generative AI, not a game-changing breakthrough. Their outlook on the industry remains the same: the computing market could more than double, surpassing $500 billion between 2025 and 2029.
While DeepSeek’s innovations may help lower AI training costs, BofA argues they don’t offer a big competitive advantage since similar optimizations are already available. AI infrastructure spending—especially in Western markets—continues to be driven by artificial general intelligence (AGI), enterprise adoption, and the growth of edge AI.
Some investors worry that AI investments will shift more toward inference (using trained AI models) instead of training (building the models), but BofA sees training as a long-term driver of demand. They pointed to OpenAI’s o3 model, which focuses on reasoning and accuracy, as proof that compute-heavy training will remain essential.
On the custom AI chip vs. GPU debate, BofA sees value in both. Broadcom and Marvell’s ASIC chips are cost-efficient, but NVIDIA’s GPUs offer flexibility in a fast-changing AI market.
Comparing DeepSeek’s impact to Sputnik’s role in the space race, analysts suggested it could spur even more AI investment. They remain bullish on semiconductor companies, seeing them as key to AI’s continued growth.
