Chip stocks rally as US, China negotiate on trade

The Philadelphia semiconductor index .SOX was up 2% on Monday, after hitting its highest point since Feb 21 as delegates from the United States and China met in London to negotiate on trade

U.S./China officials seeking to defuse high-stakes trade dispute that widened from tariffs to restrictions over rare earths, threatening a global supply chain, slower economic growth

Kim Forrest, founder, CIO of Bokeh Capital Partners says China-US trade talks likely behind the semi rally adding that "China’s investment in AI could benefit the sector if other countries are allowed to ship product there."

All stocks in the SOX were higher on the day except Broadcom Inc AVGO.O, down 1.3% and eyeing a third straight day of declines after it failed to impress investors, if not analysts, with its revenue forecast last week

While AVGO cited strong demand for networking, custom AI computing chips Forrest says its AI segment "can’t really move the needle in revenue as much as investors would like." Still, multiple brokerages raised their PTs for AVGO with the median PT climbing to $273 from $230 a month ago

Entegris ENTG.O, supplier of advanced materials, process solutions for high-tech industries including semis was biggest SOX gainer. ENTG last up 8.1% at $78.83 after rising as high as $79.47

SOX biggest index point boosts from Advanced Micro Devices AMD.O, up 3% after Citi raised PT to $120 from $100. Heavyweight Nvidia Corp NVDA.O gave up some gains and was last up 0.5%

Qualcomm QCOM.O was up 3.2%, after it agreed to acquire UK chip co Alphawave AWE.L for about $2.4 billion to expand into booming AI data center market. Deal sent Alphawave shares up more than 18% in London.

SOX had risen nearly 3% earlier in session before paring, and is up ~3% YTD