AI Chip Stocks in Focus: AMD Upgrade, Foxconn Q2 Surge

Gotrade News - AI infrastructure and chip stocks moved back into focus this week as Foxconn posted a 39.8% jump in second-quarter revenue, Wall Street lifted its price targets on Advanced Micro Devices, and BlackRock singled out Broadcom among its most important AI names. Taken together, the updates point to a data-center buildout that is still accelerating, with server manufacturers, semiconductor designers, and networking suppliers all reporting stronger demand tied to artificial intelligence. According to Investing.com, Foxconn's quarterly revenue reached T$2.513 trillion, or about $78.71 billion, comfortably ahead of the LSEG consensus estimate of T$2.372 trillion.

Foxconn Revenue Jumps 39.8% on AI Server Demand

Foxconn, formally Hon Hai Precision Industry, is the world's largest contract electronics manufacturer and the primary server maker for Nvidia (NVDA), as well as the top iPhone assembler for Apple. The company attributed the beat to strong demand for AI cloud and networking products, and said it expects AI rack shipments to keep growing through the current quarter. That guidance matters for the broader chip trade, because Foxconn sits at the point where semiconductor orders convert into finished server racks, making its shipment outlook a read-through on downstream demand for accelerators and networking silicon.

The company was not uniformly bullish. As reported by Investing.com, Foxconn cautioned on the "impact of global political and economic volatility," a reminder that supply-chain concentration and geopolitics remain live risks even as AI order books expand. For investors, the takeaway is a familiar one this cycle: robust top-line growth paired with an explicit flag on external uncertainty.

Wells Fargo Lifts AMD Target to $615

The analyst community stayed constructive on the semiconductor names powering the buildout. Per Insider Monkey, Wells Fargo maintained its Overweight rating on Advanced Micro Devices (AMD) and raised its price target from $505 to $615 on June 30, pointing to strong EPYC server-CPU demand and data-center GPU strength. The bank also lifted its earnings estimates, forecasting EPS of $13.40 for 2027 and $18.75 for 2028.

Wells Fargo was not alone in turning more optimistic. According to Insider Monkey, Cantor Fitzgerald raised its AMD target to $700 the same day, citing what it described as a "generational cycle" in AI semiconductors. The dual upgrades underscore how quickly sell-side expectations have re-rated for AMD as its data-center franchise scales against a market that Nvidia still dominates.

BlackRock Names Broadcom Among Top 30 AI Stocks

Networking and connectivity are emerging as the next competitive front, and that theme puts Broadcom (AVGO) in the spotlight. As reported by Insider Monkey, Broadcom was named one of BlackRock's 30 most important AI stocks, supported by an edge-AI networking portfolio that includes a 50G PON gateway system-on-chip with an embedded neural processing unit, Wi-Fi 8, and a joint fixed-wireless-access platform developed with Samsung.

Sell-side sentiment reinforced the view. According to Insider Monkey, JPMorgan maintained an Overweight rating on Broadcom with a $580 price target on June 17, calling the valuation "highly attractive." Broadcom's positioning across custom accelerators and networking gives it exposure to two of the fastest-growing layers of AI infrastructure spending.

Jensen Huang Flags Silicon Photonics as Next Bottleneck

The demand picture is also shifting toward a new constraint. Per The Motley Fool, Nvidia CEO Jensen Huang has highlighted data-transfer speed between chips and servers as the emerging bottleneck, a problem that silicon photonics technology is designed to address.

"The amount of silicon photonics technology capacity that we need is substantially higher than the world has today," Huang said, according to The Motley Fool.

That capacity gap has already benefited photonics suppliers. As reported by The Motley Fool, Coherent (COHR) has gained roughly 110% year to date, with Nvidia holding a $2 billion stake, while Lumentum (LITE) is up about 130% year to date with a similar $2 billion stake, and Nokia (NOK) has risen more than 100% year to date, backed by a $1 billion Nvidia investment. The strategic stakes signal how central optical interconnects have become to Nvidia's roadmap.

What It Means for the Chip Trade

The through-line across these updates is breadth. Demand strength is showing up not only at the accelerator layer, where Nvidia and AMD compete, but across contract manufacturing, networking silicon, and optical interconnects. Foxconn's shipment guidance points to sustained order flow, the AMD upgrades reflect a widening data-center franchise, and BlackRock's endorsement of Broadcom highlights the growing importance of connectivity. With Huang framing silicon photonics as the next capacity constraint, the AI-infrastructure investment thesis appears to be broadening rather than narrowing, spreading the potential upside across more layers of the semiconductor supply chain.

Sources

• Foxconn Q2 revenue surges on AI boost, warns on geopolitics (Investing.com)
• Nvidia CEO Jensen Huang Highlighted a New AI Bottleneck. 3 AI Stocks That Could Benefit (The Motley Fool)
• Wells Fargo Upholds Overweight Rating for Advanced Micro Devices (AMD) (Insider Monkey)
• Broadcom (AVGO) is One of BlackRock's 30 Most Important AI Stocks, Here is Why (Insider Monkey)