Truist analyst William Stein attended CES 2025 this past week and hosted several meetings with high-profile companies in the semiconductor sector.

The over-arching theme is that spending on AI infrastructure is firm, which benefits Nvidia Corp (NASDAQ:NVDA) as it penetrates the $35 billion client compute market, challenging Intel Corp (NASDAQ:INTC) and Advanced Micro Devices, Inc (NASDAQ:AMD).

Demand for diversified end market semiconductors is mixed to weak, with ON Semiconductor Corp (NASDAQ:ON) sounding particularly weak, prompting an analyst downgrade. Additionally, Stein increased his Analog Devices, Inc (NASDAQ:ADI) price target.

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Stein noted Nvidia as the AI company, a sustainable leader in massively parallel and heterogeneous compute chips, software, and, lately, services to enable AI & related applications. Nvidia’s leadership is steered more by its culture of innovation, an ecosystem of incumbency, and substantial investment in software, services, and base AI models, making its chips a default choice for most engineers building AI systems.

The analyst expects Nvidia’s superior gaming and server acceleration positioning and AI to support structural fundamental growth and stock outperformance. Stein noted that Analog Devices is capitalizing on sound organic investments and creating a better future with M&A, including accelerating sales growth and improving expense efficiencies.

After a series of stumbles, Intel lost its leadership positions in semiconductor manufacturing process technology to Taiwan Semiconductor Manufacturing Co (NYSE:TSM) and CPU performance to AMD.

The company recently established a clear goal to regain process and product leadership. Currently, and over the next few years, the company’s competitive position, margins, and cash flows have subsided.

On Semiconductor is in the middle to late innings of a significant transformation. The changes are rooted in shifting to an “IP-first” strategy from a “manufacturing-first” strategy. Unfortunately, the company is experiencing a substantial shortfall in demand that mutes Stein’s optimism in the near to medium term.

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