Deal activity in chip sector likely to pick up in 2025, J.P.Morgan says
** J.P.Morgan says deal activity in the chip sector has slowed over the past several years given the macro environment, but it expects M&A to potentially pick up in 2025
** In 2024, the overall semiconductor cycle continued to slowly improve; however, diverging trends were observed between AI and non-AI semiconductor businesses - J.P.Morgan
** AI compute, networking and custom chip businesses have benefited from a strong AI infrastructure build-out, which has resulted in share price outperformance and a positive earnings trend - JPM
** Analog devices, microcontroller units and semiconductor capital equipment providers have underperformed on slower end-market recovery as concerns increase around softer demand and geopolitical uncertainty, which is, however, expected to improve in the second half of 2025 - JPM
** Demand for chip design software tools from Synopsys SNPS.O and Cadence Design Systems CDNS.O remains strong driven by rising chip complexity and strong chip design activity
** Strong AI server spending benefits Nvidia NVDA.O, Arm Holdings O9Ty.F , Advanced Micro Devices AMD.O, Marvell Technology MRVL.O and Broadcom AVGO.O
Reporting by Priyanka.G in Bengaluru
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