Will semiconductor stocks go up, or down? Probably.
BY DUFF MCDONALD
redherring.com
Let us say this about the Nasdaq's performance this summer: it wasn't hard to keep track of which way it was going. A dismal August saw the index in free fall, dropping 10.9 percent with rarely a day above water. Not so for semiconductor stocks. One day up, the next day down, the sector has been prisoner to equity analysts and their paroxysms over the iconic chip cycle. Since July 31, these folks have offered us a wholesale upgrade, an equally wholesale downgrade, an "I told you so," another upgrade, and, in the end, more questions than when we started.
Reactions were as diverse as the analyst actions themselves. The Philadelphia Semiconductor Index (SOX) moved 4 percent or more on 7 of 23 trading days during August, and ended the month down 7.1 percent. Along the way, some market watchers became more convinced that their outlook for chip stocks was the correct one, just as others became more convinced that Wall Street analysts don't know a semiconductor from Adam. In the hope of determining the difference ourselves, Red Herring will address a handful of interesting (to us at least) questions that arose in the waning days of summer. |
