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Chipmakers Continue Rally, but One Analyst Warns of 'Chaos' Ahead

Investing.com – Bargain-hunting investors have piled into chip stocks, pushing the sector up by nearly a fifth this week. But one analyst warned of "choas" ahead.

The Philadelphia Semiconductor Index rose 4%, taking its gains for the week so far to 18%.

Stifel warned that demand issues for chipmakers could crop up next year amid coronavirus-related chaos in the supply chain as several regional shutdowns have disrupted operations for all equipment and component companies.

Among the chaos, however, there are few names that will weather the supply chain issues better  than others, such as Applied Materials (NASDAQ:AMAT)and Lam Research (NASDAQ:LRCX), according to Stifel analyst Patrick Ho.

With chipmakers forming a big part of Apple's (NASDAQ:AAPL) supply chain, some have warned that Apple may push back its 5G phones, currently expected in the fall.

"We believe the chances for a launch in the September/October timeframe is 'extremely unlikely' and would assign a 10%-15% probability it happens given the lingering supply chain issues that remain across Asia (Malaysia suppliers just halted production due to COVID-19)," Wedbush said in a note.

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