SEMICONDUCTOR STOCKS RIDING HIGH ON CHIP SHORTAGE

Share values of computer chip makers Advanced Micro Devices, Nvidia, and Qualcomm have shot up 34 percent, 48 percent, and 40 percent, respectively, since mid-October as the global chip shortage drives chip prices steadily higher.
Chip makers have been among leaders in the Standard & Poor’s 500 index, which has gained 3.9 percent over the period.
Third-quarter figures are likely to show that earnings by chip-related companies listed in the S&P grew 56 percent over the three months, compared to the previous year, better than the 40 percent projected for the index as a whole, the data service FactSet said.
Sales for the firms also probably will exceed the average for the index’s member companies, analysts told The Wall Street Journal.
The worldwide scarcity of computer chips has persisted for months, curtailing production of everything from cars to toys.
Earnings reports from chip makers indicate that the shortage will endure for some time yet, analysts told the WSJ.
TREND FORECAST: We forecast the shortage will continue for several more months (see related story in this issue), as we reported in “Global Chip Shortage Slashes Economic Outlook” (2 Nov 2021).