4 chip stocks to own into Q3 earnings: Deutsche Bank weighs in

Deutsche Bank has identified four Buy-rated semiconductor stocks, emphasizing a market split between robust AI-driven demand and broader chipmaking softness. The firm raised price targets for Broadcom (to $400) and Marvell Technology (to $90), citing their strong AI exposure, custom silicon leadership, and high-speed connectivity solutions, with Marvell also benefiting from an S&P upgrade. NXP Semiconductors (PT raised to $265) was favored for its strong execution in automotive and industrial segments, benefiting from EV adoption, despite a recent revenue decline. Conversely, ON Semiconductor's price target was lowered (to $55) due to temporary automotive and industrial inventory adjustments, though it remains a long-term beneficiary of EV growth and silicon carbide technology, recently acquiring AI data center power management capabilities.

Analysis

Deutsche Bank maintains a bullish stance on select semiconductor stocks, highlighting a growing divergence between robust AI-driven demand and broader industry weakness. The firm emphasizes a preference for companies with strong AI exposure and reasonable valuations, identifying four Buy-rated stocks. This indicates a selective approach to the sector, favoring specific growth narratives over general market trends.

Broadcom (AVGO) and Marvell Technology (MRVL) received raised price targets to $400 and $90, respectively, driven by their significant AI-related strength. Broadcom benefits from leadership in custom silicon and networking chips, capitalizing on hyperscale data center spending and a partnership with OpenAI. Marvell is positioned for AI infrastructure and high-speed connectivity, with S&P Global Ratings upgrading its credit to 'BBB' from 'BBB-' due to improved AI and cloud demand.

NXP Semiconductors (NXPI) saw its target price increased to $265, lauded for strong execution in automotive and industrial segments despite a Q2 2025 revenue decline of 6% year-over-year. Conversely, ON Semiconductor's (ON) target was reduced to $55 due to temporary automotive and industrial demand weakness. However, ON is viewed as a long-term beneficiary of EV growth and silicon carbide technology, further bolstered by its acquisition of Aura Semiconductor's Vcore power technologies for AI data centers.

Key Decisions for Investors

• Investors should prioritize semiconductor companies with clear, strong exposure to AI infrastructure and custom silicon, such as Broadcom and Marvell, given their raised price targets and specific growth catalysts.
• Consider NXP Semiconductors for its consistent performance in the automotive and industrial sectors, recognizing its long-term benefits from EV adoption despite short-term revenue fluctuations.
• Monitor ON Semiconductor for potential entry points after short-term inventory adjustments, as its strategic focus on EV, silicon carbide, and recent AI-related acquisition position it for long-term growth.