Responding To Industry News: Of Banks And Semis

The semiconductor industry has decoupled: Demand for AI and advanced chips is booming, while the outlook for legacy and non-AI semiconductors is downbeat. We upgrade the US semiconductors to overweight on a tactical investment horizon as Nvidia’s good fortunes will drive the performance of the entire industry. We also reiterate overweight in Diversified Financials and Capital Markets as the resurgence in capital market activity is still in its early innings and will continue to drive the outperformance of the nation’s largest investment banks.