Nomura Instinet is bullish on the semiconductor industry, saying the sector is well insulated against the wider market volatility and presents a buying opportunity for investors.
Analyst David Wong says total semiconductor sales rose 7% in February from a year earlier. That followed 7% growth in January.
The firm notes that chip and chip-equipment stock prices have dropped substantially in recent weeks, reflecting near-term uncertainty. That decline provides a strong buying opportunity for the sector, according to Wong.
"We continue to think that the long-term secular growth opportunity for semiconductor equipment is unchanged," he said.
In addition, "the semiconductor-equipment industry could be a beneficiary of efforts by various governments to support their economies by supporting investment in infrastructure," Wong wrote.
"[Lam] has been affected by and will continue to feel the effects of covid-19 through the majority of calendar 2020," Wong said.
But this has already been, for the most part, priced into Lam’s stock recently. Lam’s stock is currently trading at a substantial discount to where it was trading at the beginning of calendar 2020, prior to the covid-19 outbreak."
At last check:
Applied Materials shares were 5.2% higher at $44.50.
Intel shares were up 5% at $56.85.
KLA shares added 4.7% to $134.
Lam Research shares were 5.9% ahead at $231.
Qualcomm shares moved up 4.9% to $68.40.
Xilinx shares gained 2.3% to $80.90.