MW These 2 chip stocks were added to Deutsche Bank's list of top tech picks

By Hannah Pedone

Applied Materials shares look set to continue to benefit from recent chip-sector strength, while Broadcom's stock should rebound as AI-chip revenue grows

Deutsche Bank added Applied Materials and Broadcom to its list of top tech picks for the next 12 months.

With the start of 2026 highlighted by strength in the chip sector, Deutsche Bank added shares of two heavyweights - one a recent underperformer - to its list of top investment ideas for the next 12 months.

Applied Materials (AMAT) is one of the new additions to the list, compiled by Deutsche Bank analysts at the start of second quarter.

Analyst Melissa Weathers said that Applied Materials looks primed to benefit from recent chip-sector strength and an uptick in demand for its dynamic random-access memory chips - a major revenue segment for the company.

She said that another catalyst for the company is the fact that Taiwan Semiconductor Manufacturing Co. $(TSM)$, a buyer of Applied Materials' chip equipment, has substantially increased plans for capital expenditures as it builds new fabs to produce chips in Arizona as well as Taiwan.

Weathers acknowledged concerns over risks from Applied Materials' exposure to China, given that country's push to build out its domestic chip industry. Yet she believes that the company is deeply embedded within the market, and is preferred enough over local competitors to hedge this risk.

Shares of Applied Materials have rallied 38.3% so far this year, while the PHLX Semiconductor Index SOX has gained 10% and the S&P 500 SPX has slipped 4%.

Read more: These stocks are 'the place to be' if you want serious AI growth, says BofA

Broadcom $(AVGO)$ is another of Deutsche Bank's new picks. Analyst Ross Seymore sees momentum in the company's artificial-intelligence-oriented semiconductor business across both networking and compute. He notes that Broadcom has confirmed six customers and is expected to generate upwards of $100 billion in AI-chip revenue in fiscal 2027.

Seymore also said that the company has maintained an additional stream of non-AI-chip-related revenue, including from its infrastructure software business.

He noted that Broadcom announced on its last earnings call that it expects to generate stable gross margins for its chip business due to its high pricing strategy, which has helped offset the cost of ramping up production of its custom chips.

Broadcom's stock has lost 9.9% this year, after soaring 49.3% last year.

Deutsche Bank analysts also put shares of Oracle $(ORCL)$, Spotify (SPOT), T-Mobile US $(TMUS)$, data-center operator Digital Realty Trust (DLR) and digital forensics company Cellebrite DI (CLBT) in their list of top tech picks.

See also: Micron's stock gains officially carry the company into an exclusive club

-Hannah Pedone

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April 01, 2026 15:20 ET (19:20 GMT)

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