2 AI Chip Stocks I'd Buy Before Their Next Earnings Reports

Broadcom projects $100 billion in fiscal 2027 sales from custom AI chips and is tied to a $21 billion TPU order, giving it a clear revenue runway and a potential gross-margin catalyst if AI ASICs don’t depress semiconductor margins. AMD is positioned to benefit from supply-constrained, higher-priced data-center CPUs and has GPU partnerships whose first deployments are expected in H2 2026, so management may issue strong guidance when AMD reports fiscal Q1 in early May. Both narratives are constructive ahead of earnings and could move individual stocks roughly 1–3% on positive results or guidance.

Analysis

Winners will include CPU vendors that secure TSMC capacity and networking suppliers that capture higher ASIC + switch content per AI rack; losers are firms with excess legacy capacity or weak packaging/thermal roadmaps. A meaningful second-order effect: sustained CPU-led orchestration of agentic workloads drives durable incremental demand for DDR5 memory, server power distribution and optical interconnects — not just GPUs — concentrating margin expansion in companies that sell multiple datacenter components.

Key near-term catalysts are the upcoming earnings and guidance cadence where investors will reprice multi-quarter capex trajectories, and Broadcom’s first clear gross-margin print on AI ASICs. Time horizons differ: earnings moves (days) will be volatile, guidance re-anchoring (weeks–months) will drive positioning, and infrastructure rollouts (years) determine long-term winners; model-efficiency gains or hyperscaler procurement cadence changes are the principal tail risks that could materially compress hardware TAM.

The consensus overlooks the procurement bargaining leverage hyperscalers will exert as they standardize AI stacks — this favors suppliers who can bundle silicon plus networking/firmware, and penalizes pure-play chip vendors without sticky software integration. That implies event-driven arbitrage: validate Broadcom’s margin story before increasing exposure, use relative-positioning to monetize implied dispersion around AMD versus legacy x86 incumbents, and prefer networking/optics suppliers as asymmetric ways to play rack-level content growth without sole dependence on GPU share outcomes.

Key Decisions for Investors

• AMD — Short-dated, earnings-week bull-call spread (buy AM D near-the-money May calls, sell 1–2 strikes OTM) sized for a max loss equal to the spread premium; objective: capture a 20–35% upside on a strong guide, stop-loss on 50% premium decay. Timeframe: 0–30 days (earnings event). Rationale: directional but capital-efficient bet on CPU pricing/guidance re-rating.
• AVGO — Do not initiate large outright longs pre-earnings; plan to buy a June-to-September call spread only after gross-margin confirmation (or on a post-earnings dip). Risk/reward: limit downside to premium; target 15–30% move if margins prove non-dilutive. Timeframe: event-triggered within 1–3 months.
• Pair trade (3–12 months) — Long AMD / Short INTC dollar-neutral pair sized to target 20–40% relative outperformance. Rationale: asymmetric exposure to TSMC-driven AI CPU adoption versus Intel IDM execution risk; cut pair if AMD underperforms by 15% or Intel outperforms by 15%.
• Networking/Infra exposure — Buy core positions or 3–9 month calls in high-content networking/optics suppliers (e.g., Marvell/Arista equivalents) to capture switch/optics upside without sole reliance on GPU winners. Timeframe: 3–12 months; set 12–18% stop-loss, target 30–50% upside if hyperscaler rack builds accelerate.