Morgan Stanley: Semiconductor Stock Support Levels Could Be 15% Below Current Levels

on October 26, Morgan Stanley stated that pressure on semiconductor stocks may ease next month. The strategist team led by Mike Wilson maintained its forecast for the S&P 500 index to reach 8,000 points by year-end, while also noting that semiconductor stocks, as a key sector, may find support at levels significantly below current prices. According to the strategist team, as investors grow concerned about when AI-driven revenue opportunities will materialize and their true scale, semiconductor and other sectors benefiting from capital expenditure are becoming the epicenter of funding concerns.

Given that additional financing activities may occur in the future, the team stated: “It is natural for the market to focus on this supply pressure, and these concerns will likely persist until the financing is completed.” They believe the good news is that the semiconductor sector’s pullback has entered its “final phase” and is projected to end by mid-November. On the downside, based on technical analysis and parallels drawn with the previously hot silver market, the sector could decline an additional 10% to 15%, with the Philadelphia Semiconductor Index potentially falling to around 9,500 in the near term. (Jin10)