Investing.com -- Cantor Fitzgerald has turned bullish on analog semiconductor stocks in the near term, pointing to improving cyclical indicators and favorable investor positioning.
“The typical Analog playbook says to buy the group today,” analysts led by Matthew Prisco said in a Wednesday note, highlighting recent trends such as revenue bottoms, positive preannouncements, rising book-to-bill ratios, and more upbeat management tones.
However, the outlook remains clouded heading into year-end due to lingering macroeconomic and geopolitical uncertainties.
“We are clear buyers today, but recommend re-evaluation post 2Q reports,” the analysts said, cautioning that sustained end-demand growth will be critical to maintain momentum and justify elevated valuations.
While the group has surged nearly 50% on average over the past two months—outpacing the Philadelphia Semiconductor Index—Cantor notes that this rebound may be partly driven by tariff-related pull-ins rather than a genuine cyclical recovery.
The broker warns that tariff pauses in the U.S.-EU and U.S.-China trade talks could “very much impact Analog 3Q guides,” depending on their outcomes.
“Fortunately, the China pause is in effect until August 12th, which comes after most Analog earnings – so less of an issue near-term, but clearly an important date to keep in mind,” Cantor noted.
Among individual names, Analog Devices (NASDAQ:ADI) is Cantor’s top pick, rated Overweight with a $270 price target, calling it a “best-in-class Analog company, with outsized Industrial exposure preferential into the upcycle.”
NXP Semiconductors (NASDAQ:NXPI) also received an Overweight rating, viewed as “perhaps the best value play within Analog today.”
The analysts said NXP’s “structural transformation is not yet fully appreciated by the Street,” pointing out a “tremendous growth opportunity” for the long term.
Meanwhile, Texas Instruments (NASDAQ:TXN), Microchip (NASDAQ:MCHP), and ON Semiconductor (NASDAQ:ON) are rated Neutral due to limited upside following recent rallies and structural headwinds.
Overall, Cantor remains optimistic about the long-term analog growth story, forecasting high-single-digit annual growth driven by secular demand in automotive and industrial end markets.
But for now, it sees a “fluid situation through year-end,” advising investors to stay nimble amid unresolved trade risks and uncertain macro conditions.
