Wall Street zeroes in on semiconductors after turbulent week

US semiconductor companies will get a closer look from investors in coming weeks, after diverging reports from two industry leaders abroad set off a volatile few days of trading.

The Philadelphia SE Semiconductor index has pulled back after climbing more than 40% in the first half of the year. It is now up about 25% in 2024 against a 22.5% gain for the benchmark S&P 500.

Semiconductor and related equipment stocks account for 11.5% of the weight of the S&P 500. Nvidia, which is approaching Apple as the largest company by market value, holds a 6.8% weight in the index.

Following the dueling announcements, the SOX semiconductor index is down 2.5% so far this week, with the S&P 500 up 0.5%.

Overall, Morgan said, the semiconductor group is trading at 5.6 times price-to-book valuation, which he said was fair, noting that group topped 8 times price-to-book levels in 2021.