Benzinga·2025-10-28 13:21Core Insights - Nvidia, AMD, and Broadcom's combined market value surged from approximately $600 billion to nearly $6.8 trillion over three years, indicating a tenfold increase in valuation [1][2] - Nvidia leads the semiconductor revolution with a forward P/E ratio of 42.5x, which is 64% above the sector median, while AMD and Broadcom also trade at multiples significantly higher than their historical norms [2][6] - Institutional investors, including hedge funds, are increasing their semiconductor exposure, betting on continued AI spending growth [4][5] Company Performance - Nvidia is recognized as the most valuable commodity on Wall Street, with analysts projecting a 45% upside for its stock [5] - AMD and Broadcom are also expected to see significant stock price increases, with projected upsides of 13% and 16%, respectively [5] - The companies are viewed as essential infrastructure in the AI era, with earnings growth outpacing expectations [3][6] Market Sentiment - Despite high valuations, institutional investors remain committed to these stocks, viewing AI demand as a long-term growth driver [4][6] - The market perceives the current high valuations as a new normal rather than a bubble, with many investors treating pullbacks as buying opportunities [6][7] - The significant price increases of 1,000% over three years for these companies have led to a belief that fighting against their growth could be more costly than chasing their stocks [7]