Semis: Green Shoots Sprouting

After a prolonged slump, there are early signs that demand for chips has bottomed and is showing signs of life. Meanwhile, corporate demand for future GAI chips is still a significant industry tailwind. In line with our call for an overweight of the Magnificent Seven, upgrade Semis to equal weight from underweight on a tactical basis. Longer-term outlook is neutral to negative as we expect the economy to slow in 2024, while growth expectations may be too high.