Beyond AI: Opportunities in semiconductors

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U.S. equities have been on a tear in recent years. After climbing 26% in 2023, the S&P 500 finished up 25% on a total return basis in 2024, marking the best two-year stretch for the index since the late 90s. That said, with a select few companies driving the bulk of this rally, markets have become unbalanced, and concentration risk remains a significant issue heading into 2025. In times like these, active management is as important as ever. Our thirteenth season of Insights Now, titled “The Analyst’s Edge: A day in the life of equity research analysts,” will be all about the research backing our portfolio managers’ investment decisions. We will sit down with best-in-class buy-side equity research analysts from across J.P. Morgan, exploring a range of sectors and diving deeper into the most exciting trends driving markets today. With a new administration taking the White House, 2025 is likely to be another exciting yet volatile year for equity investors, so stay tuned to learn more about the opportunities we are following most closely.

At the heart of the recent equity market rally sits the semiconductor industry. Home to companies like Nvidia, Broadcom and other key beneficiaries of the AI frenzy, semiconductor stocks gained over 75% in 2024, far outpacing the broader market. That said, semiconductor applications extend far beyond just artificial intelligence. Companies serving traditional end-markets, like automotive, consumers, aerospace or defense, have lagged behind. While artificial intelligence will remain a key source of demand for the industry, improving demand from these other end-users could drive the next leg of the rally.

To share the latest on the semiconductor industry, Gabriela Santos, the new co-host, will be joined by Eric Ghernati, a technology-focused equity research analyst here at J.P. Morgan Asset Management.

Resources:

Subscribe to the Notes on the Week Ahead podcast for more insights from Dr. David Kelly: Apple Podcasts | Spotify