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Introduction

This article highlights this week's performance of each of the 6 sub-portfolios, totaling 26 constituents, in our model AI Semiconductor Stocks Portfolio, the focus of each portfolio, the constituents in each, the catalyst(s) contributing to their stock price changes along with the focus of each, and a YTD (as of October 2nd) chart of the sum total of their performances compliments of portfolioslab.com.

Our Model AI Semiconductor Stocks Portfolio

1. The Pure-Play Semiconductor Supplier Model Portfolio: UP 6.3% w/e October 3rd
   • Focus: The constituents in this portfolio provide 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): Lithography (ASML), etching (LRCX), metrology (KLAC), and deposition (AMAT) are needed to manufacture advanced nodes and 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 Semiconductor Foundries Model Portfolio: UP 6.0% w/e October 3rd 
   • Focus: The constituents in this Portfolio concentrate all their efforts in the manufacture of chips based on the designs provided by other semiconductor companies. 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): Constituent stock prices are benefiting from overflow demand and specialty nodes for edge AI, automotive, and IoT and are seen as indispensable players in the next wave of semiconductor innovation.
3. The Pure-Play Outsourced Semiconductor Assembly and Test (OSAT) Model Portfolio: UP 0.6% w/e October 3rd
   • Focus: The constituents in this portfolio assemble chips into finished semiconductor components, tests for defects and do the very specialized packaging of the chips for shipping. Amkor is positioned 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): The global AI boom, smartphone refresh cycles, and automotive chip growth has resulted in a surge in demand for advanced semiconductor packaging, resulting in a corresponding surge in the stock prices of Amkor and ASE.
4. The Integrated Device Manufacturer (IDM) Model Portfolio: UP 3.0% w/e October 3rd
   • Focus: The constituents in this Portfolio do everything themselves in house to control the entire production process of 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. 
5. The Pure-Play Fabless Semiconductor Companies Model Portfolio: UP 2.9% w/e October 3rd
   • Focus: The constituents in this Portfolio 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.
6. The Pure-Play EDA Software Chip Design Model Portfolio: DOWN 1.0% w/e October 3rd
   • Focus: The constituents in this Portfolio 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 Design 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 still adversely affected this week by Synopsys' Q3 financial report in August of disappointing earnings, and a cut in its FY guidance.  

Summary

The above 6 sub-portfolios in our model AI Semiconductor Stocks Portfolio was UP 4.5% w/e October 3rd, on average, outperforming the Nasdaq which was only UP 1.2% this week, and is now UP 37.0% YTD vs. the Nasdaq which is only UP 18.0%

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