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The analyst expects to see a “modest beat/raise on tap for most” companies but this should be seen in the context of investors still fearful of greater cycle/macro fears.
“Our recent channel checks in Asia reveal improving lead times and supply. PMICs remain a notable component bottleneck. At foundry, advanced node supply is better, trailing edge relatively tight. PC, handset, and TV markets are expected flat/down this year following robust COVID-inspired growth in ‘20/’21. Auto production is being hindered by geopolitical conflict and China COVID shutdowns. Server is expected up 10% this year (cloud server up 20%). 5G BTS builds are accelerating in US (C-Band) along with Europe/Korea. ASPs expected up selectively, driving more than half of some companies’ topline growth and setting up tougher comps in 2023,” Schafer said in a client note.
The analyst has urged investors to remain stock-selective and focus on companies that are “gaining content/ share in core growth verticals DC/cloud, 5G, and Auto.”
Along these lines, Schafer reiterated his top picks in this sector: Marvell (NASDAQ:MRVL), Monolithic Power Systems (NASDAQ:MPWR), Nvidia (NASDAQ:NVDA), and Broadcom (NASDAQ:AVGO).
By Senad Karaahmetovic
