Sheaff Brock CIO Dave Gilreath explores chip stocks and their possible trading opportunities in an article for Financial Advisor Magazine, “Why Chip Stocks Are a Near- and Long-Term No-Brainer.”
“Many advisors may be letting the new bear market and fears of near-term recession deter them from taking advantage of low semi valuations. Contrary to the philosophy of strategic opportunism they may espouse, they’re staying away,” Gilreath writes.
Gilreath includes a few points of research to support the possibility of growth “as the super cycle that began in 2020 continues, a report from McKinsey & Co. concludes.”
- For 2022, growth of about 10% is projected—to a record $600 billion-plus—and by 2030, to more than $1 trillion, reports Deloitte, characterizing this growth as “robust.”
- These projections are linked with extremely high confidence in the industry—at an all-time high, KPMG reports—regarding performance this year. About 95% of semiconductor company leaders forecast their revenue to grow this year—68% of them at 11% or more. Further, 88% expect to expand capital spending and workforces this year.
- About 70% of the industry’s growth this year will be driven by just three user industries: automotive, computation, and data storage/wireless.
The highly digital focus of the United States should continue to drive demand for chip stocks, keeping tech as a market driver.