ON, Analog Devices lead chips higher as sector gets set for Q3 earnings
adventtr
Semiconductor stocks were higher on Tuesday as the sector awaited third-quarter results, led by moves higher in ON Semiconductor (ON) and Analog Devices (ADI).
ON Semiconductor (ON) rose 3.3% and Analog Devices (ADI) gained 2.4%, even as Bank of America cautioned against investors having too much exposure to the analog, industrial and automotive parts of the semiconductor market.
"While content drivers (EVs, ADAS, factory automation, etc.) can propel long-term auto/industrial semis sales to 10%+ CAGR (from 5%-6%), we see near-term risks related to late cycle corrections (segment inventory 35 days above median)," the analysts wrote.
Conversely, the firm recommended investors having exposure to areas such as artificial intelligence and cloud computing and chip design. In these areas, Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO), Marvell Technology (MRVL), Arm Holdings (ARM), Synopsys (SNPS) and Cadence Design Systems (CDNS) are seen as beneficiaries.
Nvidia shares rose 1.9%, while Broadcom tacked on 1.8% and Marvel rose 2.2%. Arm, Synopsys and Cadence Design Systems rose 2%, 2.9% and 2.2%, respectively.
Magnachip Semiconductor (MX) shares rose nearly 2% as the company announced the launch of two new 150V *MXT MV Metal-Oxide-Semiconductor Field-Effect Transistors.
AMD (NASDAQ:AMD) shares rose 1.6% as the company announced its intention to acquire open source AI software company, Noda.ai.
âThe addition of the talented Nod.ai team accelerates our ability to advance open-source compiler technology and enable portable, high-performance AI solutions across the AMD product portfolio," AMD senior vice president of AI group Vamsi Boppana said in a statement. 
Taiwan Semiconductor (NYSE:TSM) shares rose 1.7% as investment firm Susquehanna said the global foundry is likely to report margin upside as part of its third quarter results, slated to be released next week.
Analyst Mehdi Hosseini, who has a positive rating on Taiwan Semiconductor (TSM) shares, said he thinks gross margins could be strong due to the average selling price for wafers, moderation in depreciation and amortization, "favorable" foreign exchange rates and better utilization rates.
Most other semiconductor stocks were higher on Tuesday, including Qualcomm (QCOM), NXP Semiconductors (NXPI), Intel (INTC) and Texas Instruments (TXN).

More on AMD, Taiwan Semi and more

Nvidia: The King Of AI And The Sword Of Damocles
TSMC: Arizona Plant Delay Is Just Short-Term Noise; Reiterate Strong Buy
TSMC: Why Near-Term Downside Is Highly Probable (Rating Downgrade)
Taiwan Semiconductor Q3 results likely to see margin upside, Susquehanna says
AMD to acquire open-source AI software expert Nod.ai