Technology manufacturers experience the longest winning streak since 2017, propelled by the surge in Artificial Intelligence.
Semiconductor Sector Soars: A Year of Growth and Positive Signs
The semiconductor industry has been on a remarkable trajectory this year, with the Philadelphia Stock Exchange Semiconductor Index posting its ninth consecutive positive session, a feat not seen since 2017. The index, which tracks the performance of semiconductor companies, has surged by 22% this year and has outperformed the Nasdaq 100 Index, which has gained almost 16%.
On Tuesday, several notable companies in the sector saw significant movements. Applied Materials' shares added 1.5%, Intel's shares rose 2%, and ON Semiconductor's shares jumped 3%. However, Nvidia's shares fell 1.6%, and Broadcom's shares sank 1.1%, despite both companies still posting impressive year-to-date gains of more than 30% and 55%, respectively.
Wayne Kaufman, chief market analyst at Phoenix Financial Services, attributes this growth to the AI buildout and the overall tech sector being driven by semiconductors. Kaufman notes that companies are making large, future-oriented orders for semiconductors, indicating a perceived need for increased capacity for AI.
One of the key drivers of this growth is Taiwan Semiconductor Manufacturing (TSMC), one of the largest players in the semiconductor sector. TSMC stands out as a particularly profitable company this year, benefiting from its leading position in advanced chip manufacturing and strong demand in areas such as artificial intelligence and high-performance computing.
Kaufman identifies Nvidia and TSMC as the big winners in the semiconductor sector. He believes that the demand for semiconductors, particularly for AI, looks sustainable. However, he also suggests that while some names in the semiconductor sector might become overbought in the short term, the overall demand for semiconductors remains strong.
Recent developments, such as the AI infrastructure deal between Microsoft and Nebius Group, and Oracle's recent earnings report, are also viewed as positive signs by Kaufman for the semiconductor group. As we move forward, it will be interesting to see how the semiconductor sector continues to evolve and contribute to the broader tech landscape.
Read also:
- Indian Oil Corporation's Panipat Refinery secures India's inaugural ISCC CORSIA accreditation for Sustainable Aviation Fuel production
- Ford Bets on an Affordable Electric Pickup Revolution with a $30,000 Design
- Rapid Charging Stations for Electric Vehicles Avoiding Grid Overload
- TikTok's Artificial Intelligence Regulation Approach Meets Stiff Opposition from German Trade Union
