Rosenblatt names top semiconductor picks amid data-center strength

Rosenblatt Securities has named AMD as its top semiconductor pick heading into earnings season, citing strengthening data-center fundamentals and broadening demand despite recent share price declines across the sector.

The semiconductor group with significant data-center revenue exposure has seen share prices decline approximately 25% on average over the past month, according to Rosenblatt Securities. However, the firm notes that data-center fundamentals continue to strengthen, with supporting evidence including strong earnings reports from Penguin Solutions, Micron, TSMC, and Texas Instruments, along with Supermicro’s positive preannouncement.

AMD

Rosenblatt Securities’ top pick is supported by several growth catalysts. TSMC’s 2nm capacity is expected to double in 2027, which will support the ramp of AMD’s Venice server CPU family. The firm views Venice as the market’s highest-performing server CPU, featuring 16 memory channels compared to 12 in the prior generation. AMD CEO Lisa Su recently increased the projected 2030 server CPU total addressable market to $220 billion from $120 billion.

Meta’s Muse and other emerging personal AI agents are driving server CPU demand, according to the firm. Rosenblatt notes that strong CPU demand and greater memory capacity create favorable conditions for the company. The firm’s primary concern for data-center growth in 2027 and beyond is supply-chain capacity rather than demand weakness. Lam Research cited near-term supply constraints, while Texas Instruments highlighted extended lead times for back-end equipment.

However, Rosenblatt characterizes these as tactical challenges that the industry can address, rather than evidence of severe product shortages or weakening demand. The firm favors companies positioned to expand capacity and capture that demand.