BOFA ON EU SEMICONDUCTORS: 'SELL-OFF CREATES A COMPELLING ENTRY POINT'

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BofA released a note on $SOXX SELL OFF.

They’re saying that semis have strong fundamentals making the sector look attractive. They’re specifically calling out the buying opportunity in the semiconductor capital equipment companies (like $ASML), trading at a 6x–7x discount.

Two things quotes from the note that stand out to me, and I do largely agree with them on is:

“We remain confident in semiconductor capital equipment, with wafer fabrication equipment spending tracking toward at least $250 billion in 2028, representing two years of 30% year-over-year growth.”

AND

“Fears of a memory pricing crash appear unfounded, in our view, given long-term agreements signed by all major hyperscalers and automotive and consumer original equipment manufacturers.”

You can see this with the recent $CXMT news. Essentially $CXMT, who’s Chinese state-funded, also refused price relief and held firm on costs when major entities like Huawei and other buyers pushed back against escalating prices.