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Once again, a stock market analyst warns against investing in chip manufacturers. Chris Caso of investment company Raymond James has downgraded the sector. He did this following discussions in Asia with suppliers of smartphones, computers and network products, among other things.

Based on the interviews and data collected, Caso concludes that the market is in cyclical decline. For this reason, the semiconductor market is being downgraded and it is recommended to sell shares. Since September, according to Caso, there has also been negative sentiment in the sector.

Disappointing results?

Caso expects that various chip manufacturers will have to deal with declining demand. He downgrades Intel and Monolithic Power Systems, among others, to companies whose shares should be sold now. This also applies to companies such as Analog Devices, Microchip Technology and ON Semiconductor.

Caso thus joins a growing group of analysts who argue that the shares of chip manufacturers might be better sold. The sector has been doing very well in the past two years, but would have to deal with major setbacks. For example, press agency Bloomberg writes that Goldman Sachs warned that delivery and pricing problems will cause greater problems for chip manufacturers.

Also something good

It’s not all doom and gloom in the sector. Keybanc analysts think that companies like Analog Devices, Advances Micro Devices, Intel and Taxes Instruments will do well in the long run. The companies are likely to experience a contraction in the coming period, but the outlook is good.

Despite the worrying trends that Raymond James sees, the company remains optimistic about two chip manufacturers: Nvidia and Qorvo. Both companies would have to deal with unique positive trends, which means that they will not experience any shrinkage.

This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.