ETF X-Ray: Semiconductor Stocks Face a “Bearish” 2024

[Turn Your Images On] [ETF X-Ray: Semiconductor Stocks Face a “Bearish” 2024]( [Turn Your Images On] [Matt Clark]( Chief Research Analyst Semiconductors are the lifeblood of our favorite devices. From mobile phones to consumer electronics to cars, semiconductors are essential components to turn electric currents on and off. Our internet doesn’t work without semiconductors. Heck, even that rice cooker in your kitchen won’t function without semiconductors. These chips come in all sizes and are produced all over the world. And while this was once a hot sector to invest in, the market has started to cool. Today, I’ll look at the semiconductor sector’s performance in 2023 and examine its prospects in 2024. With the help of Adam O’Dell’s proprietary Green Zone Power Ratings system, I’ll show you the industry's health today. --------------------------------------------------------------- [Turn Your Images On]( From our Partners at Banyan Hill Publishing. [Why 7 Billionaires Are Piling Into This Stock]( Thanks to a new battery technology, electric vehicles (EVs) may cost the same as gas-powered cars — by next year… and one company that pioneered this new technology could offer the investment of a lifetime. - It has already attracted seven billionaire investors… - The technology is protected by 200 patents… - It is expected to trigger a 1,500% surge in EV sales over the next 4 years. [See if this stock is a good fit for your portfolio.]( --------------------------------------------------------------- Semiconductors Had a Lackluster 2023 Semiconductor stocks started last year off with a strong rally boosted by two words: artificial intelligence. Private company OpenAI launched its AI-based ChatGPT later in 2022, and the world went bonkers. AI’s grip on the public discussion pushed semiconductor stocks higher because semiconductors increase processing power which aids in the development of AI systems. [Turn Your Images On] [(Click here to view larger image.)]( The SPDR S&P 500 Semiconductor ETF (NYSE: XSD) is an exchange-traded fund (ETF) that tracks the semiconductor market. After hitting a low in October 2023, XSD jumped 37.5% to close out the calendar year up nearly 35% thanks to the hype surrounding AI and a more accommodative Federal Reserve. As the AI hangover kicked in to start 2024, semiconductor stocks felt the pain to the tune of a 2% drop in the first three trading days of the year. The big question for investors now is whether semiconductor stocks can reverse this funk and rekindle the momentum that pushed XSD close to a new high last year. --------------------------------------------------------------- [Turn Your Images On]( [“Infinite Energy”: New AI Tech Unleashes Largest Untapped Energy Source on Earth]( A tiny Silicon Valley company is using artificial intelligence to unleash the largest untapped energy source in the world. I’m not talking about oil, gas, wind, solar, hydro, nuclear … or anything you’ve likely heard about before… Yet this breakthrough is set to help launch an era of cheap, abundant electricity the likes of which the world has never seen. In fact, the growth here could be almost unimaginable. [To get the whole story, including details of the company responsible, click here now…]( --------------------------------------------------------------- The Prospects for Semiconductor Stocks in 2024 Are Mixed KPMG and the Global Semiconductor Alliance conduct an annual survey on the outlook of the industry. Some interesting highlights from its 2024 edition: - While 83% of semiconductor executives said they project growing company revenues, only 40% expect that growth to be 10% or more. - One of the biggest headwinds for semiconductors is lower customer demand for new chips. - The Semiconductor Industry Confidence Index for 2024 was 54 — the lowest reading in five years. This tells me the AI buzz that pushed semiconductor stocks up in the latter part of 2023 was short-lived, and pressure in the industry is mounting. With that as a backdrop, I turned to Green Zone Power Ratings. Something I find valuable when analyzing specific sectors is to run all of the holdings in the sector ETF and run them through Adam’s system. This gives me two important pieces of information: - A great overall picture of the health of leading stocks in the specific sector. - Strong individual leaders and weak laggards within the fund. I did that for XSD and came up with some interesting tidbits of analysis: XSD Semiconductor ETF Rates “Bearish” [Turn Your Images On] The average overall rating of the 38 stocks held in XSD was a “Bearish” 38. This tells me there is some broad weakness in the sector. A “Bearish” outlook on stocks means we expect them to underperform the broader market over the next 12 months. There are some strong stocks in the mix — Universal Display Corp. (Nasdaq: OLED) is the highest-rated stock in the ETF with an overall rating of 75. Broadcom Inc. (Nasdaq: AVGO) is another strong performer with an overall rating of 70. But investing in a basket of semiconductor stocks through a fund like XSD isn’t the way. Now, that doesn’t mean the sector should be completely hands-off. You just have to do some homework and use our Green Zone Power Ratings system to help lead the way. Until next time… Safe trading, [Matt Clark]( Chief Research Analyst, Money & Markets --------------------------------------------------------------- Check Out More From Stock Power Daily: - [CAN LULU AND PLNT RIDE THE RESOLUTION WAVE?]( - [PREPARING FOR THE PRESIDENTIAL CYCLE]( - [4 MEGA TRENDS FOR 2024]( --------------------------------------------------------------- [Turn Your Images On]( Privacy Policy The Money & Markets, P.O. Box 8378, Delray Beach, FL 33482. 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