Morgan Stanley strategists see semiconductor shares falling another 10% to 15% before a correction they expect to end around mid-November, putting the PHLX Semiconductor Sector Index near 9,500.
Nasdaq recorded the index at 10,779.46 at the Oct. 23 close. The bank’s 9,500 level is 11.9% below that finish, within its range for further declines in chip stocks. Nasdaq lists 30 components in the index.
The bank’s forecast pairs the possibility of further losses with an expected end to the sector’s pullback around mid-November. Both the index level and the timing are projections.
In an earlier Oct. 13 assessment, Morgan Stanley warned that low earnings-based valuations for Samsung and SK Hynix could occur near a peak in the memory cycle. That warning focused on two South Korean companies; the new index estimate addresses chip shares more broadly.
