Dan Niles: Semiconductor bulls should be ecstatic with sector's price action
Speakers
Dan Niles
— Founder & Portfolio Manager, Niles Investment Management
Summary
Dan Niles argues that semiconductor bulls should be ecstatic given the sector's price action, as a 12% drop in Broadcom barely moved the semiconductor index. He attributes the resilience to strong earnings growth driven by agentic AI and token production, and advises staying long the sector.
- Broadcom dropped 12% on a guidance miss, but the semiconductor index only fell 1%.
- The semiconductor index is up 95% from its March 30 low.
- Dan Niles sees this resilience as a very bullish signal for the sector.
- He cites agentic AI and token production doubling as fundamental drivers of earnings growth.
- He disputes the notion that AI is a bubble, pointing to a large-cap semi growing revenue 80% at a 25x multiple.
- The speaker does not name specific stocks but endorses a long bias on semiconductors.
Trade Ideas
Semiconductor sector is resilient and bullish.
The semiconductor sector's price action is overwhelmingly bullish: despite Broadcom falling 12%, the semiconductor index dropped only ~1%, and the index is up 95% from its March 30 closing low. This resilience, combined with accelerating AI-driven demand from agents and token production, supports a positive outlook for semiconductor stocks. The speaker recommends being long or maintaining exposure to the sector.
