The question that hung over artificial-intelligence stocks for most of last year, whether the hundreds of billions of dollars spent from hyperscalers and flowing into data centers would ever pay off, has effectively been settled, according to Bank of America.

In a note published Monday, BofA Securities analyst Vivek Arya wrote that the worry now isn't whether AI spending earns a return, but whether chipmakers can keep up with demand.

“Despite ongoing volatility from geopolitics and rates, we see semiconductors as one of the most powerful secular calls for sustained outperformance in the AI era,” Arya said.

Arya believes that the case for investing in chip stocks remains strong, as “scarcity drives secular upside,” and has named seven stocks to play this theme.

They are Nvidia Corp. (NASDAQ:NVDA), Credo Technology Group Holding Ltd (NASDAQ:CRDO), Analog Devices Inc. (NASDAQ:ADI), Texas Instruments Inc. (NASDAQ:TXN), KLA Corp. (NASDAQ:KLAC), Microchip Technology Inc. (NASDAQ:MCHP) and Cadence Design Systems Inc. (NASDAQ:CDNS), all rated Buy.

From ‘Will It Pay Off' To ‘Can We Keep Up'

AI usage has exploded: token consumption, the work a model does, is up roughly sevenfold in a year, and Google AI queries are up more than 300%.

Agentic software, which runs multi-step tasks on ...