WOLF - Semiconductors Winners And Losers At The Start Of H2 2024

2024-07-02 17:14:17 ET

Summary

• Semis outperformed in H1 2024 thanks to favorable conditions, which remain out there going into H2 2024.
• AI made a huge difference in shaping the results for semis, but it seems China may have also contributed to determining the winners and losers.
• A strong H1 2024 does not guarantee a repeat in H2 2024, and there are several reasons why, with escalating global tensions the most likely candidate.
• Investors always have the option of sitting out and coming back at a later time, provided one did not suffer debilitating losses in the preceding period.

Semiconductor stocks continue to outperform heading into H2 2024. There was an early scare in the quarter as a result of global tensions, but Q2 2024 was similar to Q1 2024 in many instances, including in the way semis trended higher to outperform most other sectors. However, some semis are doing much better than others. In fact, semis are increasingly being divided into the haves and the have-nots. Why will be covered next.

The uptrend in semis remains in spite of an early challenge in Q2 2024

A previous article at the start of Q2 2024 mentioned how volatility was likely to increase and Q2 2024 certainly experienced a spike in volatility. The chart below of the iShares Semiconductor ETF ( SOXX ), which tracks 30 stocks active in the semiconductor space, shows how there was a major drop in April, which can be attributed to fears of an escalation of violence in the Middle East. This caused SOXX to drop below the uptrend that started in November 2023 and which lasted all of Q1 2024....

For further details see: