Semiconductor Q2 Earnings Preview: Analyst Calls AI 'Shining Pillar Of Strength,' Flags 3 Companies For Favorable Risk-Reward
Portfolio Pulse from Shanthi Rexaline
KeyBanc Capital Markets analyst John Vinh is optimistic about the semiconductor sector despite soft chip demand, highlighting AI as a key strength. Vinh named Nvidia Corp., Marvel Technology, Inc., and ON Semiconductor Corp. as best positioned ahead of Q2 earnings. However, he expressed caution about Advanced Micro Devices, Inc. and Texas Instruments, Inc. due to various challenges. The Invesco PHLX Semiconductor ETF ended Friday's session down 1.10%.
July 17, 2023 | 8:52 am
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NEGATIVE IMPACT
The analyst expressed caution about AMD due to higher Milan inventory, muted server demand, and stability issues with low-power APU “Phoenix”. This poses a risk to the Q3 guidance.
The challenges faced by AMD and the analyst's caution suggest potential stock price decrease.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 100
NEGATIVE IMPACT
The analyst expressed caution about Texas Instruments due to weak China demand and aggressive price actions that could impact near-term fundamentals and gross margins.
The challenges faced by Texas Instruments and the analyst's caution suggest potential stock price decrease.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 100
NEUTRAL IMPACT
The Invesco PHLX Semiconductor ETF ended Friday's session down 1.10%. The ETF gained roughly 14% in the second quarter and is up about 50% so far this year.
The ETF's recent performance suggests a neutral short-term impact on its price.
CONFIDENCE 90
IMPORTANCE 60
RELEVANCE 100
POSITIVE IMPACT
Marvel Tech is expected to recover in the second half, supported by cloud data center and AI demand. The analyst expects in line to slightly higher Q2 results and higher Q3 guidance.
The expected recovery and positive outlook for Marvel Tech suggest potential stock price increase.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 100
POSITIVE IMPACT
Nvidia is well-positioned due to its dominant position in generative AI and expected continued growth. The analyst expects above-consensus quarterly results and forward guidance.
Nvidia's strong position in AI and expected growth make it a favorable pick. The analyst's positive outlook suggests potential stock price increase.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
ON Semiconductor is expected to benefit from healthy demand for auto and industrial segments. The analyst expects strong results and guidance.
The positive outlook for ON Semiconductor due to healthy demand suggests potential stock price increase.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 100