Nvidia and Broadcom could rally over 25% in new chip surge

After a broad rally in semiconductor stocks, attention is returning to giants Nvidia and Broadcom, whose potential breakouts could add significant new momentum to the sector with analysts seeing potential upside of more than 25 percent for each.

"If the leadership baton is indeed passing back to the megacaps, the semiconductor rally might be entering an even more powerful and sustainable phase," wrote Doug Busch, senior technical analyst at Barron’s Investor Circle, in a recent note.

Technical chart patterns for Nvidia (NVDA) suggest a potential 31 percent gain to $248 by late 2026, while Broadcom (AVGO) could see a 27 percent gain to $475 by the end of the year. The VanEck Semiconductor ETF (SMH) has been on a nine-day winning streak, signaling broad strength in the sector that now looks for its largest members to confirm the trend.

A confirmed breakout in these two market leaders would likely reinforce the dominant AI-driven market narrative, potentially lifting the entire technology sector and validating the rally's underlying strength. The move follows a period where smaller players like Aehr Test Systems (AEHR) and Marvell Technology have posted gains of 50 percent or more year-to-date.

Nvidia Eyes 31% Gain

Nvidia, the world's only $4 trillion stock, has seen its price stall to just a two percent gain over the last three months despite being up 70 percent over the last year. However, recent action shows renewed momentum, with back-to-back six percent weekly gains. The stock has recaptured its 50-day and 200-day moving averages, a strong technical signal.

Analysts are watching a potential double-bottom pattern that started above the $200 level. A breakout above the pivot level of $197.73 could confirm the pattern, opening the way for a move toward $248, representing a 31 percent gain from current levels. The analysis suggests remaining bullish on the stock as long as it holds above the $179 support level. This follows a period where the stock has underperformed rival Advanced Micro Devices (AMD) on a ratio basis since last October.

Broadcom's Breakout Signals Strength

Broadcom, another key player in AI chips, surged more than 18 percent in a single week, its best weekly return in five months. The stock has been trading in a range between $300 and $400 since last September, but recently broke out from a double-bottom base pattern above a $353.24 pivot.

This breakout from a long consolidation period is seen as a sign of strength. Analysts see the potential for the stock to rally back toward the top of its long-term range, targeting a price of $475 by year-end for a 27 percent gain. The move is supported by a ferocious surge on its ratio chart against competitor Intel (INTC). The recommended strategy is to buy the stock on any pullbacks toward the $365 level, with a stop-loss for the bullish view if it falls below $345.

This article is for informational purposes only and does not constitute investment advice.