Marvell (MRVL), Broadcom (AVGO), AMD (AMD), Analog Devices (ADI), Nvidia (NVDA) GlobalFoundries (GFS), and On Semiconductor (ON) are the stocks best positioned to navigate what appears to be a tricky market for semiconductors in the near future, says Bank of America (BAC) Analyst Vivek Arya.
While the triple-A acronym might not be as well-known as some other stock group acronyms, MAAANGO stocks represent tech stocks with relatively resilient supply chains in a semiconductor industry that has been shaky at best since the pandemic.
“I know it’s a very interesting term,” the Bank of America analyst told Yahoo Finance Live reporters in a recent segment. “But the reason we came up with that term was really to help investors focus on the names that they should start re-engaging with as investors start to go and look at the semiconductor stocks.”
The ongoing semiconductor chip shortage has persisted throughout 2022 and has affected production across the world. Benjamin Loh, CEO of Dutch semiconductor equipment manufacturer ASM International, told Nikkei Asia that the effects of the shortage were likely to last “throughout this year.”
Supply chain disruptions and rising prices have not totally stifled demand for semiconductor chips, however. Chips are an integral part of many consumer tech goods, like phones and computers, and are also forecasted to play an important role in 5G/6G wireless rollout as well as in the continued development of artificial intelligence.
South Korean billionaire Chey Tae-won’s SK Group recently announced an investment of two trillion won ($1.6 billion) into semiconductors over the next three years, as reported by Forbes.
Demand for chips from MAAANGO companies is sturdy and likely to persist past concerns related to the conflict in Ukraine and rising global energy prices, Arya said.
“In certain areas tied to cloud computing, tied to AI, tied to enterprise demand, certain parts of automotive and industrial markets, we think the demand is very strong, very resilient,” he said.
“But there are parts of the consumer market, which are tied to smartphones or PCs, where you do have the exposure to the consumer who is being impacted by the perception around the conflicts in Europe or just rising inflation. So we think that there is a disparity where parts of the market are very strong, tied to enterprise and cloud, but parts of the market tied to consumers are somewhat decelerating at the margins.”
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.
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