JPMorgan Analysts Recommend Investing in European Chipmakers Amidst Market Recovery
Investors looking to cash in on the improving microchip market have been advised by JPMorgan analysts to consider investing in VAT Group, ASML Holding, and ASM International. These three European companies are expected to benefit the most from the current market trends, with a focus on memory chips.
The market for memory chips is showing signs of a bumper recovery, with inventory levels for computer storage chips currently below average seasonal levels. Companies that are least exposed to the auto and industrial sectors, like VAT Group, ASML Holding, and ASM International, are set to reap the rewards in the near term.
VAT Group specializes in making vacuum valves for chip manufacturing, while ASML Holding and ASM International are known for producing lithography machines. The shares of all three companies have seen significant gains over the past year, making them attractive options for investors.
On the other hand, companies like Infineon Technologies and STMicroelectronics, which are more exposed to the auto and tech industries, are likely to continue trading at subdued levels. Inventory levels for chips in these sectors are currently higher than three-year seasonal averages, while inventory levels for memory chips have dramatically improved.
ASML Holding, the world’s sole manufacturer of extreme ultraviolet lithography machines used for AI chips, is a key player in the market. ASM International designs wafer processing machines, and VAT Group produces vacuum valves for chip manufacturing.
As investors eagerly await Nvidia’s quarterly results, there is growing excitement around a possible AI-driven boom in the chip market. The health of the global chip market will be closely watched, with Nvidia’s performance potentially providing valuable insights for investors.
