The Chipmakers Paradox: Stocks in Freefall Even as Demand Stays Strong
- Analysts see earnings for industry rising 18% this year
- Bulls betting that sales won’t collapse in economic downturn
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Demand for semiconductors has never been higher, with industry sales increasing by more than 20% each month for almost a year now. Yet chip stocks are one of the worst-performing sectors in the U.S. market this year.
That paradox reflects the cliff that investors see looming for the economy and the stock market because of a toxic combination of surging inflation and higher interest rates. Chips, used in everything from cars to computers to factory equipment, are seen as one of the sectors in technology that’s most tied to the cycles of the economy.