<div id="readability-page-1"><div><div>With over $350 billion already funneled into artificial intelligence infrastructure, Goldman Sachs says the next phase of chip investing hinges on performance, cost-efficiency, and software breadth, setting the stage for new market leaders and fresh laggards.Goldman Sachs analyst James Schneider sees the AI investment cycle transitioning from blind spending to early monetization, driving both opportunities and shakeouts across the semiconductor space.In a new note shared Friday, Goldman rated seven top semiconductor stocks and introduced a “barbell” investing strategy: buy two types of companies. First, the performance leaders with strong software ecosystems. Second, the low-cost chipmakers helping companies run AI at scale.&#34;Although monetization has been elusive, we see early signs of incremental revenue and much clearer evidence of cost takeout to justify these investments,&#34; Schneider said.Four stocks earned a Buy rating: Nvidia Corp. NVDA, Broadcom Inc. AVGO, Cadence Design Systems Inc. CDNS and Synopsys Inc. SNPS. Goldman is Neutral on Advanced Micro Devices Inc. AMD, Arm Holdings PLC ARM and Marvell Technology Inc. MRVL. <h3>Nvidia And Broadcom Are Still The Big AI Bets</h3>Goldman sees Nvidia as the primary beneficiary of the ongoing AI buildout. Despite talk of “peak AI” and rising competition from custom chips, Nvidia's strong product lineup, broad customer base and early signs of AI revenue give it the edge. Goldman set a $185 price target on the stock, or 12% above current market prices.Broadcom is also a top pick. Goldman expects AI-related revenue to make up more than 40% of its total by 2026. Its strength in custom silicon for cloud giants and a solid software business make it one of the most reliable names in the space. Price target: $315, implying a 15% surge from current levels. &#34;We believe the company will leverage its leadership in enterprise networking silicon to drive outsized share in custom silicon for hyperscalers,&#34; Schneider said about Broadcom. <h3>The Quiet Power Of Cadence And Synopsys</h3>Chip design is getting more complex, and that's where software firms like Cadence and Synopsys come in.Cadence, with a $380 price target, is gaining from the rise in custom chip development. More companies are designing their own AI chips, and Cadence provides the tools they need.Synopsys, targeted at $620, is a key player in physical chip design. Its customer base is growing fast, and Goldman sees big upside—especially if its acquisition of Ansys goes through as planned.<h3>AMD, Arm, Marvell: Neutral For Now</h3>Goldman is cautious on AMD, Arm and Marvell. While all three are involved in AI, they don't offer the same upside potential right now.“Our ratings reflect a more negative risk/reward skew on these companies' shares from current levels, or areas where we see additional downside risk to fundamentals,&#34; Schneider said.AMD is in the AI race but faces tough competition from Nvidia and others. Arm has potential, but its growth depends on how widely its chip architecture spreads outside of smartphones. Marvell has AI exposure, but Goldman doesn't see enough upside right now to recommend buying.<h3>AI Is Already Saving Money—and That's Just the Start</h3>Goldman says the first wave of AI tools is already helping companies cut costs—especially by reducing headcount. The firm estimates these tools could save Fortune 500 companies about $935 billion by 2030. That cash could then fuel more investment in AI that actually drives revenue.Right now, real monetization is limited. Most AI tools still aren’t making serious money. But social media platforms are showing more engagement and better ad conversions. E-commerce is improving through smarter recommendation engines. That's the start of what could be a major return cycle.<h3>Key AI Trends To Watch</h3>Goldman laid out five major themes for the chip sector in the next 12 to 24 months:<ol> <li>AI spending is shifting from hype to real returns</li> <li>Inventory cycles and demand mismatches will matter more</li> <li>Geopolitical risks could reshape supply chains</li> <li>The battle between chip architectures—x86, ARM, RISC-V—is heating up</li> <li>Companies must decide between standard chips or building custom ones</li> </ol><ul> <li>Why IonQ Is My Top Stock Pick For 2025 </li> </ul>Photo: Shutterstock</div></div></div>

Goldman Sachs identifies four semiconductor stocks as must-buys: Nvidia, Broadcom, Cadence Design Systems, and Synopsys, while remaining neutral on AMD, Arm, and Marvell. The firm emphasizes a shift in AI investment from spending to monetization, predicting significant revenue growth for Nvidia and Broadcom. Goldman also highlights the importance of software in chip design, with Cadence and Synopsys positioned for growth. Overall, AI tools are projected to save Fortune 500 companies $935 billion by 2030, indicating a potential for increased investment in AI-driven revenue generation.

- Goldman Sachs reports that over $350 billion has been invested in AI infrastructure, with a shift towards performance and cost-efficiency in chip investing.  
- The firm rates Nvidia, Broadcom, Cadence, and Synopsys as top semiconductor stocks, while being neutral on AMD, Arm, and Marvell due to limited upside potential.  
- Goldman anticipates AI tools will save Fortune 500 companies approximately $935 billion by 2030, indicating a transition from hype to real returns in the chip sector.

Goldman Sachs: 4 Must-Buy Chip Stocks, And A Few You Should Forget