Yahoo Finance StockBeat: Semi Stocks Shine as Trade Tensions Ease
Investing.com – Semiconductor stocks delivered swashbuckling gains on Thursday thanks to easing U.S.-China trade tensions and expectations that chip stocks are set to accelerate in the second half of the year.
Micron Technology (NASDAQ:MU) and Qorvo (NASDAQ:QRVO) were up more than 3%, while Qualcomm (NASDAQ:NASDAQ:QCOM) rose more than 2%.
The Philadelphia Semiconductor Index was up 2.9%.
Fears that escalating trade tensions would weigh on economic growth in China, one of the world’s biggest spenders on chip equipment, were eased somewhat after Beijing confirmed that Vice Premier Liu He will visit Washington to resume trade talks.
A spokesperson for U.S. Trade Representative Robert Lighthizer's office also confirmed that the two nations had agreed to hold meetings "in the coming weeks."
Many will be hoping the upcoming meeting will yield a better outcome on trade as little progress was made during the last round of talks in July, with both nations imposing tariffs on each other soon after the meeting.
Trade hopes aside, however, the industry has also won the backing of some on Wall Street, who expect chip companies to improve their performances in the second half of the year.
"We remain confident in a (second-half) pickup in overall demand with near seasonal demand in PC computing, wireless/wired infrastructure (around 5G), aerospace/defense, smartphones (ex-Huawei), consumer/gaming, and a resumption in cloud/hyperscale spending trends," JPMorgan analysts said in a note.
Data center capital expenditures are also expected to increase by as much as 30% over the first half of 2019, led by spending from tech heavyweights like Microsoft, Alphabet and Facebook on chips used in artificial intelligence and cloud applications, the investment bank said.
Investors have bet big on chips in 2019. The Philly Semiconductor Index is up 35% this year while Micron (NASDAQ:MU) is up 53% and Advanced Micro Devices (NASDAQ:AMD) is up nearly 69%.
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