AMD, Nvidia, Qualcomm among KeyBanc's top semiconductor stocks for 2023
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Investment firm KeyBanc Capital Markets issued its 2023 outlook for the semiconductor market on Thursday, noting that revenue, excluding memory is likely to fall 4%, with a sharp decline in the first-half of the year, followed by a second-half recovery.
"Despite a significant pullback (-36%) in the SOX in 2022, we continue to see a soft landing scenario for semis," analyst John Vinh wrote in a note to clients, citing four reasons: 

The forward P/E for the Philadelphia Semiconductor Index and index have already declined 55% and 46% peak-to-trough, suggesting "itâs priced in."
There is better visibility on backlogs due to customer long-term agreements.
The companies have a favorable pricing leverage scenario with prices expected to rise this year.
Lastly, there are secular growth drivers, including the internet of things, electric vehicles and advanced driver assistance systems, the cloud and data centers and machine learning and artificial intelligence.

For consumer facing markets, Vinh said that PCs, smartphones and other markets should decline, but that is likely to be "partially" offset by growth in the cloud data center and automotive.
This year is expected to be a trough year for the semiconductor capital equipment industry, with overall spending likely to hit $70B, before rebounding between 10% and 15% in 2024.
While there will be some bumps and unexpected turns along the way, the firm stated that companies like AMD (NASDAQ:AMD), KLA Corp. (KLAC), MKS Instruments (MKSI), Nvidia (NASDAQ:NVDA) and Qualcomm (NASDAQ:QCOM) are its top ideas for the year.
AMD (AMD) is seen as "one of the most levered" to the cloud, gaining market share compared from Intel (NASDAQ:INTC) thanks to its Genoa ramp, which "should sustain outsized server growth."
KLA Corp. (KLAC) is the leader in process controls and has a more favorable exposure to the foundry and logic areas than its peers do.
MKS Instruments (MKSI) is in the attractive PCB market after its acquisition of Atotech and its long-term earnings power is "well above current estimates," Vinh added.
The Jensen Huang-led Nvidia (NVDA) is likely to benefit from new product ramps, including Hopper and RTX40 for data center and gaming, respectively, along with having "outsized exposure" to both machine learning and artificial intelligence. 
Lastly, Qualcomm (QCOM) should benefit from a bottoming in the smartphone market and China's "reopening" from COVID-19 should "result in multiple tailwinds."
Vinh also noted that there isn't likely to be much large scale M&A this year due to depressed valuations and higher debt financing costs, but there could be "tuck in" acquisitions. Vinh suggested that Intel (INTC), Nvidia (NVDA) and Qualcomm (QCOM) would be the most likely acquirers, while Ambarella (AMBA), indie Semiconductor (INDI), Silicon Laboratories (SLAB) and Synaptics (SYNA) are the most likely to be bought.
Earlier this week, Bank of America listed Nvidia (NVDA) among the chip stocks most likely to benefit from a "soft landing," citing a rally in the sector year-to-date.