AMD (NASDAQ:AMD), Qualcomm (NASDAQ:QCOM) and Seagate Technology (NASDAQ:STX) rose in premarket trading on Monday as Barclays upgraded the trio, citing a more positive view on the semiconductor and semiconductor capital equipment sectors.

“It would have been nice if the group got as cheap as we have seen in other downturns, but we underestimated the amount of money that wanted to move into semis and we don’t see the group testing October lows,” analyst Blayne Curtis wrote in a note to clients.

In addition to the upgrades, Curtis raised the firm’s price target on Nvidia (NVDA).

AMD (AMD) gained 2.5% in premarket trading, while Qualcomm (QCOM) and Seagate (STX) each gained approximately 2%.

Delving further, Curtis noted that the capital expenditure outlook for the cloud could be soft in the first-half of the year, but there could be a second-half acceleration both in the U.S. and China, due in part to generative AI, thus benefiting AMD (AMD) and Seagate (STX).

Curtis also noted that Marvell (MRVL), Micron (MU) and Nvidia (NVDA) could also benefit from generative AI.

Despite the upgrades, Curtis said the semiconductor industry still has pockets of weakness. Analog is not likely to see any upside due to weakness in industrial and automotive, while semiconductor capital equipment industry has the biggest disconnect on the view that wafer fab equipment spending will be down in 2024, he added.

Earlier this month, investment firm Mizuho Securities listed Qualcomm (QCOM) among its top picks in the semiconductor space for 2023.

Analysts are largely bullish on AMD (AMD). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates AMD a HOLD.