BofA says the semiconductor selloff is a buying opportunity

Analysts led by Didier Scemama noted that the Philadelphia Semiconductor Index’s roughly 18% peak-to-trough underperformance against the S&P 500 resembles the geopolitical selloffs of 2015 and 2018, rather than the approximately 30% drawdowns typically seen during full cyclical downturns
“Given strong fundamentals, we think the sector looks highly attractive trading on c3x discount to average ’28 consensus multiples and semicaps specifically at 6-7x discount,” Scemama wrote
BofA sees the greatest opportunity in semiconductor capital equipment and forecasts that wafer fab equipment spending will reach “at least $250 billion” in 2028, implying two consecutive years of roughly 30% year-over-year growth. Higher spending plans from TSMC and Intel support this outlook
Its top Buy-rated names include ASM International, STMicroelectronics and ASML, with ASML named its preferred European large-cap play. Nokia also received a Buy rating due to what BofA described as an “under-appreciated order intake of €2.8 billion.”