Overview

Stifel has highlighted Nvidia Corp (NVDA) and Advanced Micro Devices Inc (AMD) as its preferred processor stocks as the sector approaches the June‑July earnings season. The firm emphasizes that both companies stand to benefit from robust artificial‑intelligence (AI) demand and a supply‑constrained environment across hyperscalers, AI‑cloud providers, enterprises, and sovereign buyers.

Nvidia (NVDA)

Stifel designates Nvidia as its top large‑cap processor pick. The analyst expects continued strength from the Blackwell architecture and early orders for the Vera Rubin GPU line into the third fiscal quarter. Management has addressed timing concerns at a recent investor conference, reinforcing confidence in the rollout schedule. Stifel notes that compute capacity remains tight while demand expands beyond traditional hyperscalers, indicating a supply‑constrained rather than demand‑constrained market. The stock is trading at roughly 25 times fiscal‑year‑2028 earnings estimates, which Stifel deems an attractive valuation.

Recent developments include Nvidia’s announcement that AI startup Perplexity will deploy its new Vera central processing units, a partnership from which Nvidia anticipates $20 billion in sales for the current fiscal year. Both Morgan Stanley and TD Cowen have reiterated positive ratings on Nvidia, citing a strong and diversifying growth outlook.

Advanced Micro Devices (AMD)

Stifel’s second preferred processor stock is AMD, focusing on its accelerated‑computing exposure. The firm highlights the EPYC server‑CPU business, which is increasingly capturing AI‑related demand. The total addressable market for server CPUs is projected to exceed $120 billion by 2030, representing a compound annual growth rate above 35 percent.

Stifel points to several company‑specific catalysts: the second‑half launch of the MI450 and Helios product families, supported by two 6‑gigawatt power commitments from OpenAI and Meta, as well as early visibility on the MI500 line. The stock experienced an early‑July pullback of approximately 8 percent on July 7, which Stifel interprets as a reset of expectations around the MI450 ramp. Additionally, AMD’s July 23 "Advancing AI" event is seen as a potential catalyst ahead of its earnings release.

Analyst coverage updates include Wells Fargo raising its price target for AMD while maintaining an Overweight rating and increasing its server‑CPU revenue estimates. William Blair has initiated coverage with a Market Perform rating, noting AMD’s position as a major beneficiary of the AI infrastructure boom.

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