Bank of America Securities raised its 2030 forecast for the AI data-center market to $1.4 trillion, a significant increase from its previous estimate of $1.2 trillion, according to an analyst note released February 17, 2026. The revised outlook is bolstering confidence in key semiconductor stocks, particularly Nvidia (NVDA) and Broadcom (AVGO), as both companies prepare to report earnings.
The surge in optimism stems from stronger-than-expected cloud capital expenditure plans for 2026 and improved clarity regarding supply chain dynamics. Analyst Vivek Arya anticipates overall data-center systems growth of 64% year-over-year in 2026, with AI systems leading the charge at a projected 100% year-over-year increase as new accelerator deployments accelerate.
While supply concerns remain a factor, Arya downplayed near-term risks, noting that a substantial portion of the anticipated growth in High-Bandwidth Memory (HBM) – approximately 75% year-over-year – and Chip-on-Wafer-on-Substrate (CoWoS) supply – around 70% year-over-year – had already been secured from the previous year. Arya also expects AI accelerator vendors to pass on increasing HBM/DDR costs to customers, protecting margins as sales volume increases.
Nvidia, with an estimated $0.5 trillion in sales visibility through 2026, remains a central focus. Arya increased Nvidia’s revenue estimates for fiscal years 2027, 2028, and 2029 by 7%, 2%, and 2% respectively, alongside corresponding increases in earnings per share estimates of 8%, 3%, and 3%.
Broadcom is also positioned to benefit significantly from the AI boom. Morgan Stanley recently raised Broadcom’s price target to $443, maintaining an Overweight rating, and anticipates the company will outperform Nvidia in AI-related revenue. Broadcom’s semiconductor segment experienced a 292% net income gain in 2025, and the company forecasts AI custom chip revenue will double to $8.2 billion in the first quarter of 2026. The company’s networking products currently command an 80-90% market share as hyperscalers transition to Ethernet infrastructure, ensuring a substantial share of infrastructure spending.
According to a report by Seeking Alpha, Broadcom’s major customers include Google, Meta, Microsoft, and Amazon. The company also boasts a $73 billion AI backlog, supporting robust forward free cash flow and margin guidance. Marvell Technology (MRVL) also received adjusted revenue estimates from Arya following its XConn acquisition, with expectations for healthy growth in Trn3 and 800G/1.6T optics through fiscal 2027, though visibility on next-generation programs remains limited until calendar 2027.
The increased market forecast comes as investors seek alternatives to the “Magnificent Seven” tech stocks, viewing companies like Broadcom as offering lower-risk exposure to the AI market. The volatility observed in recent weeks of 2026 has prompted investors to explore opportunities outside of the most heavily invested names.
