Semiconductors surge as yield spike abates, Nvidia earnings await
Oh, and executives spent all of Tuesday talking up the strength of demand for AI infrastructure.
Semiconductors are putting their sharp, sudden three-session swoon in the rearview mirror.
The VanEck Semiconductor ETF is up about 2% in early trading. Arm Holdings, Astera Labs, Marvell Technology, Intel, and Advanced Micro Devices are all up at least 4% less than 15 minutes into the session.
What’s behind the return to form? Three things come to mind.
Semiconductors bottomed when 30-year Treasury yields peaked on Tuesday:
The surge in yields kneecapped the momentum/AI infrastructure trade; it stands to reason that some semblance of stability in the bond market would be a necessary catalyst for the softness in semiconductors to reverse course.
Seemingly 95% of major semiconductor and AI-adjacent executives spent yesterday at the JPMorgan Global Technology, Media, and Communications Conference talking about just how fast they’re growing and how robust appetite for AI infrastructure is.
These comments helped buoy sentiment for the group on Tuesday, helping the industry finish well off its lows. Astera Labs stands out as a big outperformer, with its CEO highlighting the pickup in sales of its Scorpio switches and hinting these may be further supported by other major customers lining up behind UAL networking standards.
Nvidia’s earnings may be a useful catalyst for the group by reinforcing this strength in demand, with its sales expected to be up about 80% from the year-ago quarter.
The world’s most valuable company has lagged its peers over the past 3, 6, and 12 months as traders try to find pockets of the industry poised for even more explosive growth.
