The sell-off in chip stocks on supply worries is overshadowing reasons to buy them, says Bank of America (SOX, AMAT, KLAC, LRCX, NVMI, TER, ASML, COMPX, NDX, INX, DJIA, RUI)

Posted On: May 11, 2021   |   Posted By: Business Insider

The sell-off in chip stocks on supply worries is overshadowing reasons to buy them, says Bank of America (SOX, AMAT, KLAC, LRCX, NVMI, TER, ASML, COMPX, NDX, INX, DJIA, RUI)

Summary List Placement Semiconductor stocks have been yanked lower recently on worries about a shortage of chips worldwide but likely annual growth in auto production and in smartphone shipments are among the reasons Bank of America said it still sees buying opportunities in the space.
A shortage of chips, largely stemming from production shutdowns and business restrictions resulting from the COVID-19 pandemic, has affected a wide range of companies, including Ford Motor which has said some of its factory work will be interrupted.
"To be sure, there are spot shortages in areas such as substrates, microcontrollers, image sensors, parts of memory and lagging edge processors," said Bank of America said about the semiconductor sector in a note published Tuesday.
But the investment bank reiterated its buy rating on Applied Materials , its top pick, as well as on KLA-Tencor , Lam Research , Nova Measuring Instruments and Teradyne , saying while there are shortage issues in the sector that growth concerns are...

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