Banca Profilo S p A : The semiconductors and the inflation uncertainties

For about a year now, the stock market has only rewarded passive instruments, focused on a few large titles primarily in the semiconductor sector. Semiconductors have thus become the true market beta, overshadowing active management and alpha generation.

It's a pricey sector where only a few major players dominate, such as Nvidia and Taiwan Semiconductor, which has seen revenue projections increase by over 25%. However, not all semiconductor companies are celebrating; those still anchored in traditional business models, like Intel, have faced greater challenges. Therefore, the exuberant trend of Artificial Intelligence is not as irrational as the dot-com bubble.

While acknowledging the logic behind some trends, 2024 might see a return of active management: with a bit less beta and a bit more alpha in portfolios.