While all sectors of the market are tied to the economy in some way, a few truly are cyclical, rising and falling with economic growth. And one of the biggest could be the semiconductor stocks. As a group, the chip stocks moved through the pandemic with ease as shortages and demand boosted profits. However, with inflation rising and economic worries persisting, the semis are singing a different tune.
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A few high-profile earnings misses and poor guidance figures have taken all the wind out of the groups’ sails.
The question for investors now is whether or not the sector represents a great long-term buy. Can the industry’s rich dividends hold up and carry them through to the other side?
