Bank of America Corporation reiterated its "buy" rating on semiconductor companies such as NVIDIA Corp (NVDA.US), MRVL.US (MRVL.US), AMD (AMD.US) and Broadcom Ltd (AVGO.US) on Monday, Zhitong Financial APP learned. Despite investor concerns, these companies are likely to benefit from increased spending on cloud computing, the investment bank said.

Analyst Vivek Arya updated his 2023 cloud spending forecast and now expects 7.5% growth, a slowdown from 2022, but still year-on-year growth. Arya points out that macroeconomic turmoil has slowed the pace of growth, but cloud spending is still expected to reach $170 billion in 2022, up 20 per cent from 2021. It will be even higher, reaching $183 billion by 2023.

Arya said the recent trend was volatile, although the final annual spending growth over the years was more than 30 per cent despite the previous downturn. The cycles of several new products may also drive spending growth.

NVIDIA Corp is moving to a 5-nanometer process, and the company's recently released Hopper GPU and Grace CPU product lines will perform well. The same is true of AMD and its Genoa, Bergamo and Pensando products.

The price of AMD's Genoa and Bergamo server chips is expected to be 10% to 15% higher than the current Milan, while the price of NVIDIA Corp Hopper is also likely to be higher than the current product.

Broadcom Ltd's Tomahawk5 switch chip, Maywell technology continues to expand into the cloud, and Credo Technology's active cable is also expected to see good performance. In addition, Intel Corp may also achieve sustained growth in different end markets.

However, Arya also admits that it is impossible to have a clear understanding of cloud customers' chip inventory. Still, there are several reasons to be bullish on cloud computing spending: demand for cloud services is expected to grow by more than 30% in 2023; the price of high-end chips for networks and graphics cards is likely to rise; and the target market will continue to expand.