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Tech stocks skyrocket 11% in anticipation of strong quarterly reports
21.01.2021 [11:56],
Alexey Razin

Intel Corporation will pick up the baton of quarterly reports this week, but the first results of the past reporting period are already inspiring investors who prefer to invest in shares of companies in the technology sector. The PHLX stock index has grown by 11% since the beginning of January, supported by the ASML quarterly reports published yesterday.

Image source: TSMC

As noted by Bloomberg, for the Philadelphia Semiconductor index this January will be the best in terms of growth dynamics since 2021. If the S&P 500 index covering companies from different sectors of the economy has grown by only 1.8% since the beginning of the year, then the growth in stock prices in the technology sector speaks of investor confidence in the ability of core companies to increase revenue in the foreseeable future.

Chip developers, whose shares last year, with the exception of Intel, were actively growing in price, now lose in dynamics to the securities of suppliers of equipment and materials for the production of semiconductor components. The shortage of the latter is forcing manufacturers to expand capacity, so capital costs will rise, and suppliers of equipment and materials will be among the beneficiaries of this trend.

According to Evercore ISI analysts, the most attractive for investors are the securities of ASML, Applied Materials and Lam Research. AMD, Texas Instruments and Lam Research will publish quarterly reports next week, which may become an additional catalyst for the growth of profile stock indices.

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