Market Overview

Semiconductors Being Smothered By 'Horrible Headlines'

Semiconductors Being Smothered By 'Horrible Headlines'
Related AAPL
Verizon's Wireless Segment Facing Pressure While Wireline Shows Promise
Technical Alert: Apple Trading In Very Narrow Range
Alibaba Pulls Out All the Stops For Singles Day Shopping Festival (Investor's Business Daily)
Related INTC
Tech Earnings Reflect Conscious Attempts At Circumventing Headwinds
Advanced Micro Devices' Q3 Earnings Preview: Mixed Voices From The Street
Can Chip ETFs Continue Sharp Ascent? (Investor's Business Daily)

In a report published Friday, JPMorgan analysts commented on the semiconductor space, noting that Thursday's rebound was driven on some "better-than-expected" earnings reports, but investors (mostly "faster-money" investors) are now using the bounce to take profits off the table.

"The semi news overnight was mostly fine (Maxim Integrated Products Inc. (NASDAQ: MXIM) was the overnight upside highlight while the rest can be placed in the "no-worse-than-Linear Technology Corporation (NASDAQ: LLTC) camp) but looking bigger picture the industry at the moment is being smothered by horrible headlines," the analysts stated.

Related Link: Skyworks, Qorvo, NXP Semiconductors Earnings Could Signal Apple Rebound


The analysts continued that non-iPhone wireless is "pretty bad," while at the same time Apple Inc. (NASDAQ: AAPL)'s smartphone sales growth is expected to decelerate. JPMorgan's analysts are now modeling 21 percent growth in September and "only" single-digit growth in not only in September's quarter, but in December, March 2016 and June 2016 quarters.


Meanwhile, the PC market has "stunk for months" and aren't showing any "tangible signs of stabilization." Wireless equipment (like PCs) has been "bad for a while" with no indication of "showing many signs of life." The equipment space was "hit hard" by Intel Corporation (NASDAQ: INTC)'s revised capital expenditure and 14nm pushout, raising the question of whether DRAM/NAND will expand at their scheduled pace if pricing continues to weaken.

With all that said, the analysts took a bold position and argued that the group's index (PHLX Semiconductor (INDEX: SOX) "remains a group that should be bought when things look bleakest" (which is it is right now) and sold at "peaks of euphoria."

Image Credit: Public Domain

Latest Ratings for AAPL

Oct 2016Credit SuisseMaintainsOutperform
Oct 2016UBSMaintainsBuy
Oct 2016Goldman SachsMaintainsBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: JPMorgan semiconductorAnalyst Color Top Stories Analyst Ratings Movers Tech Best of Benzinga


Related Articles (AAPL + INTC)

View Comments and Join the Discussion!