Investing.com – Cantor Fitzgerald says it views the recent semiconductor sector selloff as overdone and recommends adding to positions aggressively following a sharp recovery this week.
The semiconductor index fell approximately 30% from peak to trough over the past five weeks, while the S&P 500 declined 3% during the same period. The sector rebounded 12% this week compared to a 3% gain for the S&P 500.
Peak-to-trough declines reached 32% for small and mid-cap semiconductor production equipment stocks, 27% for memory stocks, 25% for analog stocks, and 24% for large-cap semiconductor production equipment stocks. Cantor says the AI infrastructure buildout remains durable and elongated.
The firm’s top picks include Micron Technology () and in memory, Western Digital () and Seagate Technology () in storage, and Nvidia (), Broadcom (), and Advanced Micro Devices () in AI compute. In semiconductor capital equipment, Cantor favors ASML (), Applied Materials (), Lam Research (), KLA Corporation (), Teradyne (), MKS Instruments (), and Onto Innovation (). Investors can access comprehensive Pro Research Reports for these semiconductor stocks on InvestingPro, featuring Fair Value analysis, financial health scores, and expert insights across 1,400+ US equities.
Earnings season continues with reports from and Applied Materials, while SanDisk hosts its investor day Thursday.
In other recent news, is set to release its earnings report on August 11, with the options market anticipating a potential stock movement of 9.5% following the announcement. Mizuho has reiterated its Outperform rating for Lumentum, citing strong demand for InP and projecting a more than 35% quarter-over-quarter revenue increase for the September quarter. Meanwhile, the Trump administration is contemplating new restrictions on Chinese optical transceivers, which could impact the U.S. AI supply chain. This measure would involve an updated approval process for future models rather than removing existing products. Additionally, Stifel has noted that AI infrastructure companies remain supply-constrained as they approach the June and July quarter reporting season. The firm expects these companies to continue exceeding estimates and raising guidance. Elsewhere, chip stocks, including , experienced gains in premarket trading after a previous sector selloff. Stifel attributes this decline to various factors, including Meta’s cloud entry and a more hawkish Federal Reserve.
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