US Markets
Home›US Markets›Sectors›AI enablers steal focus as Q2 earnings loom for chips
AI enablers steal focus as Q2 earnings loom for chips
Semiconductor stocks led Q2 with the Philadelphia Semiconductor index up almost 88%, far outpacing the Nasdaq 100’s 27.5% gain and the S&P 500’s nearly 15% rise.
Q2 earnings season is getting underway with Tesla and Alphabet set to kick things off on July 22, and investors are again expected to focus heavily on artificial intelligence linked names. This year, however, attention is tilting toward “AI enablers,” including semiconductor and data center equipment makers, rather than only hyperscalers that spend on AI infrastructure.
According to Action Forex, soaring demand for AI data center infrastructure has helped chipmakers, and the Philadelphia Semiconductor sector index, which tracks 30 large US traded semiconductor design and manufacturing companies, surged almost 88% in Q2. By comparison, the Nasdaq 100 rose 27.5% and the S&P 500 gained nearly 15% over the same quarter.
The outlet says the big question for Wall Street is whether AI investment by major cloud and platform companies such as Microsoft, Alphabet, Amazon, Meta, and Oracle will translate into sustained payoffs. For the recipients of that spending, the earnings outlook for semiconductors and other enablers is seen as more predictable, fueling investor demand and helping drive the emergence of new trillion dollar companies such as Micron Technology and SK Hynix.
Heading into Q2 results, Action Forex notes that the challenge for chipmakers will be sustaining revenue growth and a bullish forward outlook after a strong first quarter. It also highlights a more mixed setup within AI related names, including the idea that Nvidia’s stock performance has looked closer to broader market indices than the semiconductor gauge as its rally has cooled off, while other winners cited include Sandisk, Micron Technology, and SK Hynix.
Latest closeS&P 500 7,575.39 ▲0.4%|Nasdaq Comp. 26,281.61 ▲0.3%