|Semiconductors Everywhere Keep Bulls Charged Up After 47% Rally
by Jeran Wittenstein and Ian King
April 10, 2017, 5:00 AM EDT
- Investors betting new markets demand will bolster earnings
- Chips making their way into cars, refrigerators, everything
When a sector has as big a run as chip stocks over the last year, the temptation is to take money off the table. Maybe not this time.
The Philadelphia Semiconductor Index, composed of 30 chip-related companies, has gained 47 percent since last April, fueled by an unprecedented flood of mergers and orders for products that make up the guts of gadgets like refrigerators to smartphones. That’s made the $300 billion industry look expensive relative to earnings as growth is expected to moderate.
What it hasn’t done is make a seller out of Kim Forrest, senior equity analyst at Fort Pitt Capital Group, which manages $2 billion and owns Intel Corp. and Texas Instruments Inc. Bear cases on semiconductors miss that the industry is making its way into new markets as an increasing number of devices are hooked up to the internet and given brains, she said.
continues at bloomberg.com