Nvidia, AMD, Marvell among Credit Suisse's favorite semiconductor stocks
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Investment firm Credit Suisse initiated coverage on the semiconductor industry with an overweight rating on Wednesday, noting there has been "enough bad news" and there are certain companies that are seen more favorably than others.
Analyst Chris Caso gave outperform ratings to several companies, including Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Marvell Technology (NASDAQ:MRVL) because of their long-term growth potential, as well as those tied to handsets, including Qualcomm (QCOM), Skyworks Solutions (SWKS), Qorvo (QRVO) and others.
"We believe semiconductors are in a period of sustained long-term growth, with factors such as AI, cloud computing and automotive all driving growth thatâs more diversified vs. the past," Caso wrote in a note to clients.
The analyst added that while the sector is in an ongoing correction, the downside from here is limited, noting that multiples are close to "trough levels," even after the recent rally.
Regarding Nvidia (NVDA), Caso said the company's long-term growth in artificial intelligence, a de-risked gaming business, continued gains from its Grace and Hopper platforms and "optionality from software" provide a positive outlook on the Jensen Huang-led Nvidia (NVDA).
Nvidia (NVDA) is slated to report third-quarter results after the close of trading on Wednesday. 
For AMD (AMD), Caso added that long-term share gain is seen as "inevitable."
Marvell Technology (MRVL) could generate an additional $1.175B in revenue for fiscal 2024, Caso noted, as the company is driven by content and new opportunities and less dependent on market growth than others.
The firm is also positive on Monolithic Power (NASDAQ:MPWR), noting it has a "strong track record of long-term growth, with a history of being able to maintain growth during corrections."
The analyst noted that Micron Technology (MU) has "limited" downside to its book value at $43 per share, while Qualcomm (QCOM) is seen as the "top pick" in handsets, thanks to de-risked estimates and the potential for its contract with Apple (AAPL) over its iPhone business.
Skyworks (SWKS), Qorvo (QRVO) and GlobalFoundries (GFS) may also continue to benefit if there is an improvement in the handset market, as estimates are "derisked."
Earlier this week, Wedbush Securities analyst Matt Bryson said that while Nvidia (NVDA) has a "superior position" in the AI market, regulations over exporting to China could have an impact on areas including its data center business.