We Like Wide-Moat, Positive-Trend ASML and Nvidia to Help Investors Ride Out Choppy Waters

Amidst recent market volatility, several semiconductor stocks have fallen considerably and now look attractive relative to our fair value estimates. Despite the ongoing chip shortage, we think investors are rightly concerned about slowing demand in large end markets such as PCs and smartphones. We expect many chip firms to continue recording strong results in 2022, but we anticipate a slowdown in 2023 as demand ebbs and new supply comes online. Consequently, we are most positive on undervalued wide-moat names that we think have the most robust exposure to secular trends such as artificial intelligence, cloud computing, automotive chip content, 5G, and other promising growth vectors.