Bank of America continues to come back NVIDIA (Nasdaq: NVDA), Broadcom (Nasdaq: Avgo), Lam Research (Nasdaq: LRCX) and cadence design systems (Nasdaq: CDNS) Because its favorite semiconductors have followed the deployment by the Trump administration of new world rates.
Analysts led by Vivek Arya noted that if the semiconductor components were excluded from the list of prices, the final products they feed, including smartphones, servers and PCs, should be directly assigned. In response, the Philadelphia semiconductor index dropped by 10% compared to a 5% drop in the wider S&P 500 index.
Interior manufacturing companies such as Texas Instruments (Nasdaq: txn), Intel (Nasdaq: Intc), Globalfoundries (Nasdaq: GFS), and Loupeed (NYSE: Wolf) Has better resisted, as well as companies with significant pricing power such as Nvidia and Arm (Nasdaq: arms). Cadence of the leaders in the automation of electronic design Cadence and Synopsys (Nasdaq: SNPS) also remained relatively stable.
On the other hand, those who have an exposure to higher offshore production, including coherent (NYSE: COHR), LUUTUM (Nasdaq: Lite) and credo technology (Nasdaq: CRDO), underperform. Companies with more debts, such as MKS instruments (Nasdaq: MKSI) and micropile technology (Nasdaq: MCHP), has also been late.
The Bofa expects the AI infrastructure cycle to maintain the momentum, especially among the main American cloud suppliers, who have the capacity to maintain higher costs for critical mission deployments. In this environment, companies with solid finances and links with AI, cloud or the complexity of fleas should remain resilient.
In addition, Arya’s team cited media reports suggesting that Intel has prescribed a joint venture with Taiwan semiconductor manufacturing (NYSE: TSM) Manage parts of its production. As part of the proposed structure, TSM would hold 20% of the new company, with Intel and other companies lower in the United States holding the majority.
However, analysts have pointed out several uncertainties, including the strategic justification of the partnership, the potential overlapping of the manufacture of roadmaps and if such an enterprise align with the financing of the law on fleas and expectations of return on investment of co-investors such as Apollo and Brookfield.
This article appeared for the first time on Gurufocus.