Semiconductor stocks are ‘one of the safest places to be’ despite weakening demand

on Jul 1, 2022
  • Patrick Ho explains why he remains bullish on semiconductor stocks.
  • A name that particularly pops out to the Stifel analyst is Entegris Inc.
  • VanEck Semiconductor ETF is currently down nearly 40% for the year.

Amidst reports of weakening demand for PCs and Smartphones, a Stifel analyst continues to recommend semiconductor stocks for the long-term investors.

Ho explains why he’s sticking to semiconductor stocks

Patrick Ho agrees it will be a rough terrain for the chip stocks in the near-term, but the long-term story, he’s convinced, remains unchanged. On CNBC’s “Worldwide Exchange”, the analyst said:

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For long-term investors, I believe semis are one of the best places to be. There’s more silicon content going into a lot of applications and markets and I think it’s a big secular driver for the overall marketplace.

A day earlier, Micron Technology Inc cited weakening demand as it lowered its outlook for the current fiscal quarter. Consequently, the Bank of America downgraded it to “neutral” on Friday.  

Stocks Patrick Ho likes in the semiconductor space

A small-cap name within the semiconductor space that particularly pops out to Ho is the Massachusetts-based Entegris Inc (NASDAQ: ENTG) that’s down big from its year-to-date high. The Senior Research Analyst noted:

Entegris has contamination control solutions. As semiconductor manufacturing becomes more complex, you need more contamination control to keep yields high. So, Entegris is very well positioned from a fundamental and secular growth standpoint.

In April, Entegris reported market-beating results for its fiscal first quarter. Other names that Ho likes include MKS Instruments Inc. The VanEck Semiconductor ETF (SMH) is currently down nearly 40% versus the start of 2022.

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