Introduction

There are 6 sub-segments in the AI hardware (semiconductor/computer chip/wafer) segment and we track the performance of the largest stocks in each sub-segment  in 6 similarly focused model portfolios. Collectively, the 26 constituents were up 2.2% last week (w/e September 26th) and are now up 9.4% MTD and 29.9% YTD.

This article highlights the MTD performance of each sub-portfolio in our model AI Semiconductor Portfolio in descending order, the focus of each, the constituents in each, and the catalyst(s) contributing to the portfolio's price change, along with a YTD chart of the sum total of their performances compliments of portfolioslab.com.

Our Model AI Semiconductor Portfolio

1. The Pure-Play Semiconductor Supplier Model Portfolio: up 25.2% MTD
   • Focus: provides essential equipment for manufacturing chips such as lithography machines, etching, test and packaging equipment, automation and inspection systems and production materials such as chemicals, gases, wafers and packaging
   • Constituents: Applied Materials (AMAT); ASML Holding (ASML); KLAC Corp. (KLAC); and Lam Research (LRCX)
   • ​​​​​Price Change Catalyst(s): The global race to build AI-optimized chips has dramatically increased demand for leading-edge semiconductor equipment and ASML (lithography), LRCX (etching), KLAC (metrology), and AMAT (deposition) are needed to manufacture advanced nodes. As such, investors see these companies as essential enablers of the AI hardware wave, with long-term tailwinds from data centers, edge computing, and automotive chips.
2. The Pure-Play Outsourced Semiconductor Assembly and Test (OSAT) Model Portfolio: up 17.9% MTD
   • Focus: assembles chips into finished semiconductor components, tests for defects and do the very specialized packaging of the chips for shipping. Amkor is positioning itself as a U.S.-friendly OSAT partner, benefiting from reshoring and CHIPS Act incentives while ASE is more diversified, with EMS capabilities and a stronger presence in consumer electronics and networking.
   • Constituents: Amkor Technology (AMKR) and ASE Technology (ASX)
   • ​​​​​Price Change Catalyst(s): A surge in demand for advanced semiconductor packaging, driven by the global AI boom, smartphone refresh cycles, and automotive chip growth has resulted in a corresponding surge in the stock prices of Amkor and ASE.
3. The Pure-Play Semiconductor Foundries Model Portfolio: up 16.8% MTD 
   • Focus: concentrate all their efforts in the manufacture of chips based on the designs provided by other semiconductor companies. Specifically, each foundry occupies a distinct niche in the semiconductor ecosystem: GlobalFoundries and United Microelecronics focus on fabricating mature nodes (12nm–90nm and 28nm-90nm, respectively), Tower Semiconductor focuses on analog, RF, power and mixed-signal nodes for the automotive, industrial and medical markets and Taiwan Semiconductor specializes in fabricating leading-edge (3nm, 5nm, 7nm) nodes as well as mature nodes.
   • Constituents: GlobalFoundries (GFS); Taiwan Semiconductor (TSM); Tower Semiconductor (TSEM); and United Microelectronics  (UMC)
   • ​​​​​Price Change Catalyst(s): Constituents stock prices are benefiting from overflow demand and specialty nodes for edge AI, automotive, and IoT and seen as indispensable players in the next wave of semiconductor innovation.
4. The Pure-Play Fabless Semiconductor Companies Model Portfolio: up 7.0% MTD
   • Focus: manufacturers design and sell hardware devices and semiconductor chips themselves while outsourcing their fabrication (i.e. are fabless) to a specialized manufacturer. Each plays a distinct role in powering AI, data centers, edge devices, and automotive systems.
   • Constituents: Advanced Micro Devices (AMD);  Broadcom (AVGO); Marvell (MRVL); Monolithic Power (MPWR);   Nvidia  (NVDA);  and Qualcomm (QCOM)
   • ​​​​​Price Change Catalyst(s): All six companies are deeply embedded in the AI hardware stack - from GPUs and NPUs to networking ASICs and power management ICs - and the increase AI infrastructure demand, their strong executions, and their strategic positioning across cloud, edge, and automotive markets show continuing strength.
5. The Integrated Device Manufacturer (IDM) Model Portfolio: up 1.7% MTD
   • Focus: These companies do everything themselves in house to control the entire production process and supplying memory, analog, mixed-signal, and embedded compute that are critical for AI servers, edge inference, and sensor fusion.
   • Constituents: Analog Devices (ADI); Infineon Technologies (IFNNY); Intel Corp. (INTC);  Microchip Technology (MCHP); Micron Technology (MU); NXP Semiconductors (NXPI);  STMicroelectronics (STM); and Texas Instruments (TXN)
   • ​​​​​Price Change Catalyst(s): Infineon, NXP, and STMicroelectronics are key suppliers for ADAS, powertrain electrification, and vehicle connectivity and EV penetration and silicon content per vehicle continue to rise, lifting analog and embedded chip demand. In addition, Texas Instruments and Microchip saw renewed demand in factory automation, smart grid, and medical devices while Micron benefited from rising demand for HBM and DDR5 memory in AI workloads, ADI reported a 25% YoY revenue jump to $2.88B, driven by EV battery management systems and industrial automation, and Intel’s foundry push and AI accelerator roadmap are gaining traction. 
6. The Pure-Play EDA Software Chip Design Model Portfolio: down 12.2% MTD
   • Focus: design complex semiconductor chips using sophisticated electronic design automation (EDA) software. Synopsys is a full-stack chip design, IP licensing, and software security while Cadence concentrates on system-level integration, packaging, and simulation-heavy workflows.
   • Constituents: Cadence Design Systems (CDNS); and Synopsys (SNPS)
   • ​​​​​Price Change Catalyst(s): The Portfolio was down sharply due to disappointing earnings from Synopsys and a cut in FY guidance citing U.S.–China headwinds and slower enterprise spending causing investors to fear a broader EDA softness. That triggered a sympathy sell-off in Cadence.  

Summary

The above 6 sub-portfolios in our model AI Semiconductor Portfolio have outperformed the Nasdaq 2-to-1 MTD (9.4% vs. 4.5%), on average, and almost doubled that of the Nasdaq YTD (29.9% vs, 16.4%), on average.

Chart Of Our Model AI Semiconductor Portfolio Performance YTD

The above portfolio chart has been generated using the tools provided by PortfoliosLab.com and easy step-by-step instructions are available here to help you create a chart of your own portfolio or that of a client. It's easy, fast and free.