Analysts believe that semiconductor companies that are firmly established in the field of artificial intelligence (AI) are still the most attractive stocks.
The Zhixun Finance APP learned that as the second quarter earnings season unfolds, analysts believe that semiconductor companies that are firmly established in the field of artificial intelligence (AI) are still the most attractive stocks.
Cantor Fitzgerald analysts, led by C.J. Muse, said in a report on Tuesday: "We believe that leverage on artificial intelligence is still the most attractive stock. In addition, we expect that prices for storage manufacturers in the NAND and HDD markets will continue to rise."
Profit estimates for memory manufacturers have also been significantly revised upward.
As the second quarter earnings season begins, preferred stocks include Nvidia (NVDA.US), Western Digital (WDC.US), ASML Holding (ASML.US), Applied Materials (AMAT.US), and NXP Semiconductors (NXPI.US).
Cantor has raised target prices for nine companies:
Cantor also said that semiconductor and semiconductor equipment companies are still in the early stages of the current recovery cycle.
Muse added:"We have been in the recovery cycle for five quarters, with an average cycle of nine quarters, and we believe this cycle will be even longer."
Cantor is bullish on several large companies, including Nvidia, Micron Technology (MU.US), Broadcom, Marvell Technology (MRVL.US), Applied Materials, ASML Holding, NXP Semiconductors, and Western Digital.
Deutsche Bank also expects artificial intelligence-driven semiconductor stocks to perform well as the second quarter earnings season approaches. However, the bank pointed out that investors are becoming increasingly picky.
Deutsche Bank analyst Ross Seymore said in the report: "Investors are generally optimistic about the 'winners' of the current artificial intelligence trend, but we believe that because the positive trend may not last, their judgments on the company's performance prospects are becoming more sensitive."
The bank gave 'buy' ratings to Broadcom, Marvell Technology, Astera Labs (ALAB.US), NXP Semiconductors, and ON Semiconductor (ON.US).
Deutsche Bank is also optimistic about memory manufacturers. Deutsche Bank analyst Melissa Weathers said,"Since the beginning of the second quarter, semiconductor stocks have risen sharply by more than 10-20%, with P/E ratios approaching or exceeding their highs.""We believe that the revised estimate will be a key determinant of future upward trends."