Artificial intelligence continues to take Wall Street by storm — Nvidia reported earnings that smashed expectations on the back of demand for AI chips. “We continue to see benefits for semis as AI investment ramps,” BofA said in a recent note. It cautioned that it will be prudent for companies to show profitability from AI projects, and that could lead to “cautious data center capex spending patterns.” But bright spots could be emerging, according to the bank. It said it’s starting to see early applications of AI across some companies. For instance, AI is driving more than 20% of content on Facebook and Instagram feeds, and Google is using generative AI to improve its search capabilities, BofA said. Microsoft is also integrating AI functionality into some key software products, it noted. On the back of that AI buzz, Nvidia shares and those of other AI competitors such as Alphabet and Microsoft have already surged this year. Nvidia is has soared about 222% in the year to date, Alphabet is up 47%, and Microsoft has jumped 33%. Investors interested in buying into the market can look to BofA’s top five favorite AI-exposed stocks below, which it listed in a separate Aug. 20 note. Stock picks Broadcom : BofA pointed to the U.S. semiconductor firm’s double-digit growth of earnings per share, “best-in-semis profitability” and free cash flow generation. It gave the stock a price target of $1,050, or nearly 20% upside. Nvidia: BofA said the firm still has “stronger growth opportunities ahead,” as data centers could face strong long-term demand. It gave the stock a price target of $550, or nearly 17% upside. Marvell : The bank noted Marvell’s 15% to 20% longer-term compounded annual earnings-per-share growth potential. It gave the stock a price target of $80, or around 30% upside. Synopsys : BofA said this software company could benefit from increased government investment in semiconductor research and development. It could also enjoy share gains in existing markets, and reap “faster than expected cost improvements driving higher operating margins.” The bank gave the stock a price target of $510, or nearly 14% upside. Cadence : BofA noted the “strategic importance” of electronic design automation “in an increasingly fragmented global electronics supply chain.” Electronic design automation, which Cadence offers, refers to the use of computer programs to design chips and semiconductor devices. The bank gave the stock a price target of $285, or 25% upside. — CNBC’s Michael Bloom contributed to this report.