Qualcomm leads chip rebound as semi stocks see broad based gains
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Qualcomm (NASDAQ:QCOM) was among the largest gainers in the semiconductor sector on Wednesday as the company made a number of automotive-related announcements.
The San Diego-based chipmaker unveiled its new Snapdragon Ride Flex system-on-a-chip and a new autonomous driving platform, the Ride Flex.
It also signed a deal with Visteon (VC) to collaborate on a high-performance cockpit domain controller designed to help automakers build next-generation cockpits.
Qualcomm (QCOM) shares rose nearly 4%, while competitors Broadcom (AVGO) and NXP Semiconductors (NXPI) gained between 1.5% and 3%.
In an investment note covering the chip sector, Citi said it expects demand for semiconductors, in particular those attached to consumer markets, to get worse in the first-half of 2023, but stabilize in the second half of the year.
The firm added that it prefers markets that have been "derisked the most" compared to other corrections. As such, it believes memory and semiconductor capital equipment stocks are the furthest along in the correction, followed by PC/data center, smartphones and industrial and analog markets.
Micron Technology (NASDAQ:MU), the largest publicly traded company in the memory space, saw its shares soar more than 7%, while those linked to the PC and data center spaces, including Nvidia (NASDAQ:NVDA), Advanced Micro Devices (AMD) and Intel (INTC), gained 2.7%, 1.6% and 4.2%, respectively.
Citi's top buy-rated picks include KLA Corp. (NASDAQ:KLAC), Applied Materials (AMAT) and Lam Research (LRCX). Conversely, Qorvo (QRVO), Skyworks Solutions (SWKS) and Silicon Laboratories (SLAB) are near the bottom of the firm's specialty semis coverage list.
KLA Corp. (KLAC) rose 1.2%, while Applied Materials (AMAT) and Lam Research (LRCX) each rose 2.5%. Qorvo (QRVO), Skyworks Solutions (SWKS) and Silicon Laboratories (SLAB) also saw similar gains in mid-day trading.
Taiwan Semiconductor (TSM) and GlobalFoundries (GFS) also saw solid gains between 2.5% and 3% on the second day of trading in 2023.
Separately on Wednesday, it was reported that China was pausing some key subsidies to its domestic semiconductor industry as it responds to a wave of COVID-19 outbreaks across the country.
In December, investment firm Bernstein listed the San Diego-based Qualcomm (QCOM) among its top semiconductor picks for 2023.