These tech stocks have been on a tear with the Iran conflict raging
One of the hottest trades in the market is semiconductor stocks amid the US war against Iran.
At first blush, it would seem counterintuitive given that the war has injected fresh nervousness into the C-suite responsible for placing orders for semiconductors.
The Philadelphia Semiconductor Index (^SOX) has had its largest eight-day rally since 2002, according to new data from BTIG strategist Jonathan Krinsky on Monday.
“Semis continue to shrug off any issues and while we are hesitant to chase them here, the trend and momentum must be respected until it stops,” Krinsky wrote.
The Philadelphia Semiconductor Sector Index is a capitalization-weighted index composed of the 30 largest US companies involved in the design, distribution, manufacture, and sale of semiconductors.
It’s dominated by a few megacap names that serve as the foundation for the global artificial intelligence build-out. The four largest weightings in the index, from highest to lowest, are Nvidia (NVDA), Broadcom (AVGO), Micron (MU), and AMD (AMD).
These four chip darlings have seen their stocks surge over the past eight sessions. Memory chip player Micron has gained 31%, Broadcom is up 27%, AMD is up 25%, and Nvidia has tacked on 14%.
Besides momentum, the sector has gotten a jolt of good fundamental news recently.
Taiwan Semiconductor (TSM) delivered an impressive start to the year despite war-related uncertainty.
First quarter revenue surged 35% year over year to a record 1.134 trillion New Taiwan dollars (about $35.6 billion). This marked the first time the foundry giant’s quarterly sales had crossed the trillion-dollar threshold in local currency. Results significantly surpassed the high end of its own previous guidance.
Sales in March jumped 45% to roughly $13 billion, hinting that the AI supercycle is entering an even higher gear.
“Investors are all piling into semis and hardware as the software sector is sold off at any price. Taiwan stock market all time high last week as investors shrug off geopolitical and pile into AI hardware trade,” Wedbush tech analyst Dan Ives told Yahoo Finance.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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