Displaying items by tag: semiconductors
The infrastructure bill is not only making waves in Washington, but also on stock exchanges. The bill is going to send many stocks surging, but here are six names that look likely to do very well if the current plan passes, with a particular focus on semiconductors. One little known detail is that the Biden plan earmarks $50 bn for the US semiconductor industry and an extra ~$175 bn for electric vehicles, which will also help semiconductors. Accordingly, check out these stocks, all of which seem like good candidates for appreciation: Vishay Intertechnology (VSH), Applied Materials (AMAT), Macom Technology Solutions Holdings (MTSI), Micron Technology (MU), Analog Devices (ADI), Maxim Integrated (MXIM).
FINSUM: The semiconductor industry has been lobbying for this to help increase its eroding market share versus China and it seems like the Biden plan will deliver.
In what seems like a series of warnings out of Morgan Stanley, the bank has put out another today on a critical sector. MS says that the market darling chip sector, often referred to as semi-conductors, are in for a rough road. The bank says the sector has the poorest risk-reward ratio in years. “Cyclical indicators are flashing red … Elevated inventory and stretched lead times leave no margin for error as any lead time adjustment or demand slowdown could drive a meaningful correction”, says the bank.
FINSUM: Gains of semiconductors have greatly outpaced the market over the last three years, and MS thinks it is all about to come crashing down.
There have been a handful of articles lately presenting how one can protect their portfolio from the current trade war (hint, stay away from food companies and autos). But there have been many fewer saying how to buy into the trade war. The answer is that investors should buy less vulnerable sectors, such as semiconductors and biotechnology, which will not be as impacted by tariffs. Banks are also likely to prosper as the economy continues its run.
FINSUM: We think the idea of biotech and banks is quite a solid one. Both seem to have little direct exposure to tariffs.