Wall Street feared a repeat of 2018, when a huge demand for semiconductors suddenly disappeared and created a flood of supplies.
Why Elon Musk Just Bought Twitter
Stock
On Monday, Elon Musk bought Twitter for $ 44 billion. Musk, C.E.O. of Tesla, the world's richest man, plans to take over a private communications company, and says he wants Twitter to be more...
Stock
Tesla stock fell 11% on Tuesday as investors scrambled with Elon Musk for Twitter acquisition and increased EV competition. Musk uses most of his Tesla stake as collateral to finance the $ 44 billion acquisition on social media. Meanwhile, Ford said it was facing a strong demand for its F-150 and that it plans to produce 150,000 units by 2023. Tesla&#...
Stock
Twitter has announced that it welcomes Elon Musk's $ 44 billion promise to buy on Monday. Jeff Bezos took to Twitter to ask if Tesla's business dealings in China would empower the company. Twitter has been banned in China since June 2009 as part of the country's "Great Firewa...
Stock
Stocks of major US stocks, including Amazon.com, Inc. they trade less amidst general market weakness as the perception of Fed rates and economic concerns undermine market sentiment. U.S. references all of them are also trading lower on a continuing weakness following Federal Reserve Chairman Powell's suggestion that the rate hike ...
Semiconductor sales exceeded half a billion dollars by the 2021 record and current sales are about 2022 as global shortages continue, however chip shares have lost about a quarter of their value this year and one analyst calls the sector "almost impractical."
PHLX Semiconductor Index SOX, which reached a record high of 4,039.51 in Dec. 27, a 13% decline in the first quarter of 2022, and as of Monday, a decrease of about 24% a year so far, puts it firmly in the bear market place. On Friday, the SOX index closed at 2,989.83, the first close below 3,000 since May 19 last year, as previously hot stocks like Nvidia Corp. NVDA and Advanced Micro Devices Inc. AMD has fallen more than 30% by 2022.
That kind of selloff can often signal an opportunity to buy in chip stocks, especially as many analysts expect another quarter to hit and raise a record from the industry. That is not what Wall Street analysts say, however.
The basic fear is that semiconductor companies are set for a repeat of 2018, when the chip industry enters the fire year-round across the board, with stocks at record highs and increasing chip prices driving record sales. That led to customers buying chips triple and triple before prices skyrocketed, leading to waste disposal where the need to stop and player chip makers with inventory that took a few quarters to drain as their stock plummeted.
Evercore ISI analyst C.J. Muse recently wrote that investors are waiting for chip managers to predict that the offer will exceed demand and reduce their forecasts. That makes a temporary impression dimmed or worse, he wrote.
"From an investment perspective, semiconductor shares are virtually non-investment today," Muse wrote in a recent book. "Investors want to buy 'cuts,' but that 'cuts' may not happen until 2H22 initially."
"So we are already speculating that the near future bases are important (they did not happen to Micron) or that the market will continue to wait for future stock repairs," Muse said. Shares of Micron Technology Inc. MU fell more than 15% since the end of March, when the memory-chip manufacturer reported a strong sales led by a data center demand.
"Our feelings are volatile violence will be a new trend (up and down) until we find a way to see if we will see a soft or difficult decline," Muse said.
Raymond James analyst Chris Caso also sees the possibility of another 2018 at the moment, without seeing the end of the shortage as customers continue to order, but the capacity to overflow on the other side.
"Our main concern is that tight supply conditions and long lead times will disrupt market signals, making it difficult for the semi supply chain to adjust production forecasts and energy plans if and when the need changes," Caso said in a recent statement. note.
There are “three ingredients to weight loss: inventory, overdose and depletion. We have at least one invention, ”said Caso.
"We don't think there is an overdose now," Caso said. “But the volume is increasing, and it can cause problems on the road. What worries us most is that the current shortage creates a strong motivation to build more and more power until customers are convinced that they do not need the product. ”
Even as manufacturers complain that they can make and sell more products as long as they have the microchips needed to complete those products, not all chips are created equal. If a manufacturer has a high-level CPU that enters the product but can not get the $ 1 microprocessor needed to complete it, then the chip list does not match.
That change has not been so significant as consumer demand for the finished product is still high, but that may not be the case, especially on personal computers. The decline in PC sales is now happening, after consumers and businesses have collected new computers during the first two years of the COVID-19 epidemic and may not need to buy more.
The confusing semiconductor-sector setup will be tested this week, with a number of revenue reports following planned closure. Texas Instruments Inc. TXN reports Tuesday, Qualcomm Inc. QCOM on Wednesday, with Intel Corp. INTC on Thursday, an assortment to provide a good chip landscape survey - Texas Instruments is known for its analog chips, Qualcomm for their mobile phone. device chips, and Intel CPUs.
Two companies that should look for signals about PCs and other markets are Texas Instruments and Intel, Research analyst wrote in a recent paper.
"We expect compliance rates to increase again during the 1Q22 pay season in view of increased pay times and higher prices," analyst said. "While we believe the rise is final, we remain optimistic about the team until we see lead times go down."
“Our main concern is the upcoming PC decline and changes in investor sentiment in the negative bias that could make it difficult for the stocks to reach the top until the correction,” Danley said. “We believe that the chances of a PC dropping by 2H22 are increasing and will be worse for the team as PCs are almost 30% less demand. We expect to be led under the Intel and Texas Instruments season. ”
Analyst Mark Lipacis even said that Texas Instruments “have a big problem delivering enough parts as desperate customers pay $ 200 for $ 1-2,” but that collection is “not a problem at the moment” as it “is being collected. as OEMs are unable to complete the production and construction of finished goods. ”
Read More:
Courtesy Grizler.com
#grizler #stock #trade
