UBS sees 92% earnings growth for Philadelphia semiconductor index this year

According to CNBC, UBS on Friday forecast earnings growth of 92% this year for the Philadelphia semiconductor index and another 40% in 2027 as chip stocks sold off this week on geopolitical tensions, higher energy prices and renewed rate-hike worries. The PHLX Semiconductor index is down 8% on the week and 17% on the month, while the Roundhill Memory ETF has fallen 17% this week and the VanEck Semiconductor ETF is down 7%. UBS global head of equities Ulrike Hoffmann-Burchardi said the firm remains constructive on semiconductors because demand for compute continues to outstrip supply and capacity constraints along the supply chain are unlikely to ease quickly. Barclays traders said they are seeing no signs of panic in semiconductor trading, though investor interest in a rebound has increased. JPMorgan cited World Semiconductor Trade Statistics data showing industry sales growth accelerated to 119% in May after a 106% annual increase in April. Deutsche Bank strategist Maximilian Uleer and Wells Fargo's Ohsung Kwon also struck a more cautious tone, with Kwon saying semiconductor sentiment saw one of the sharpest four-week declines in history.