Chip Stocks Surge as Analyst Dan Ives Predicts Tech Rebound

Semiconductor stocks experienced a notable rebound after a challenging period earlier this month. The surge came as signs of progress emerged regarding trade negotiations between the US and China.

Major Market Movements

On Monday, the VanEck Semiconductor ETF (SMH) surged 2.5%, reaching a value of $359.94. This recovery followed a significant drop of 6% on October 10, marking the ETF’s largest single-day fall since April.

Analyst Insights

Analysts from firms like Wedbush Securities see potential for a technology rebound. They suggest that if trade concerns ease, leading chip manufacturers could benefit significantly from renewed investor confidence. Dan Ives, a noted analyst, emphasized that improvements in trade relations may spark this rebound.

• Advanced Micro Devices (AMD): Increased by 2.7% to $259.35.
• Nvidia Corporation (NVDA): Rose by 2.8% to $191.57.
• Broadcom Inc. (AVGO): Gained 2.2% to $363.52.
• Intel Corporation (INTC): Boosted by 3.2% to $39.60; approximately 30% of its revenue originates from China.
• Micron Technology (MU): Edged up by 0.5% to $219.33.

Recovery of Semiconductor Equipment Makers

The uptick also extended to semiconductor equipment manufacturers that had been under pressure due to high exposures in China. Notable gains included:

• Applied Materials (AMAT): Up 1.1% at $232.14.
• Lam Research (LRCX): Increased by 3.4% to $157.60.
• Cadence Design Systems (CDNS): Rose by 1.9% to $346.50, despite fluctuating restrictions on its China operations.

Potential for a Tech Turning Point

According to Ives, renewed trade discussions might signify a crucial turning point for the tech sector. He mentioned that extended months of tariff threats have negatively impacted investor enthusiasm, particularly for firms in the semiconductor and AI industries.

Ives believes a robust trade agreement could alleviate substantial concerns within the tech space, creating opportunities for growth across several sectors, including AI, semiconductors, and software.

Other analysts support this perspective, stating that a truce would help relieve supply chain pressures and stabilize chip sales to China, a vital market for the tech industry.

Chip Stock Buy Recommendations

With the upcoming holiday season and sustained demand for AI technology, investors are optimistic about key players in the semiconductor market. The following stocks are under consideration:

Overall, the developments in trade talks present an opportunity for semiconductor stocks to enhance their market performance. Investors remain cautious but hopeful as they monitor the evolving situation.