Chip stocks rally, helping Nasdaq break record

Chip stocks soared on Wednesday, helping Nasdaq hit a record high. But trade concerns linger. (Getty Images)

Chip company stocks rallied on Wednesday, helping both the Nasdaq Composite and S&P 500 reach all-time highs. The upward momentum came despite mounting concerns over a possible trade war with China and regulatory crackdowns on big tech digital platforms including Facebook.

Texas Instruments gained more than 7% to close at $129, one day after reporting second quarter results that included a 9% decline in revenues. The financial results were nonetheless better than expected, and TI said it expects to continue sales to China despite trade worries, apparently helping the stock do well.

RELATED: “TI sees 9% drop in revenue, but says Huawei, China impact was minimal”

Industry Event

Embedded Technologies Expo & Conference

Limited Passes Available - Register now and save with Early Bird Rates!

Embedded Technologies Expo & Conference is North America’s ONLY embedded event focused on helping design engineers through exhibits showcasing new and emerging products & solutions, education, training, and hands-on learning experiences. Join us in the heart of Silicon Valley - June 22-24, 2020 at the McEnery Convention Center in San Jose, CA. Use promo code FE100 for $100 off Conference Passes.

In similar fashion, the VanEck Vectors Semiconductor ETF gained 2.7%, to hit a record close at $123.31. The chip company “is a proxy for global growth,” declared Kourtney Gibson, president of Loop Capital Markets in comments on CNBC.

Silicon Laboratories also saw a large gain of 6.5%, reaching $113.74, while Taiwan Semiconductor Manufacturing Ltd. was up 0.27%, to close at $44.54.

Stocks are broadly trading near their all-time highs, but some analysts are worried that there are signs of a mixed economy that could creep in and affect trading starting next year. Some chip companies are hopeful for progress on U.S. and China trade talks, with face-to-face meetings set to resume next week.

Nonetheless, the overall picture for the chip sector isn't entirely rosy.

Chip sales have generally been down globally, as well as chip manufacturing equipment.

In one example, Benchmark Electronics reported a 41% decline in capital equipment sales for the second quarter, but expressed hopes that the segment would improve in 2020.  The company is also closing two manufacturing plants, affecting about 350 workers.


Suggested Articles

A couple companies are starting to innovate power-through-the-air technology to power small IoT sensors for use cases in industrial settings.

Tech companies unable to generate cash will likely be out of business, clearing the market, says Siebel systems founder

Israeli company UVeye has developed contact-free, emergency-vehicle inspection systems equipped with thermal sensors to monitor fever in drivers.