At a time shrouded in customs tariffs uncertainty, JP Morgan still considers these semiconductor stocks as their top choice.

Despite the tariff cloud hanging over the upcoming earnings season for tech companies, JPMorgan pointed out in a report that several semiconductor and semiconductor equipment companies are still standing out as their "top picks." These companies include Broadcom Inc. (AVGO.US), Marvell Technology, Inc. (MRVL.US), Analog Devices, Inc. (ADI.US), KLA Corporation (KLAC.US), and Synopsys, Inc. (SNPS.US). While most companies in this industry should meet market expectations for their first quarter earnings, dynamics related to tariffs and trade will likely lead to weaker performance in the second half of 2025. JPMorgan's analysis, led by Harlan Sur, stated in a report: "We expect a negative earnings revision cycle to begin in the first quarter earnings season, with forecasts for the next 12 months EPS likely to be cut by around 15% to 25% over the next two to three earnings seasons. We believe this will help semiconductor stocks hit bottom." "Given that stocks have fallen by about 25% since tariff concerns emerged, we believe there is still a further downside risk of 10% to 15% over the next few months." Despite factors related to tariffs and trade leading to weaker fundamentals for semiconductor stocks, analysts believe that the continued demand for artificial intelligence and data centers will at least partially offset these negative impacts. Analysts pointed out, "We believe that price-sensitive end markets, particularly consumer-facing end-products (such as personal computers, smartphones, and home appliances), face higher demand disruption risks compared to less price-sensitive end markets (such as server/AI spending)." "In terms of long-term trends, we remain bullish on the fundamentals of AI cloud computing/data centers and custom ASICs." Analysts added, "We currently expect semiconductor industry revenue to be flat or see a small single-digit percentage increase this year (compared to the previous expectation of 10-12% year-on-year growth). We believe the upcoming EPS revisions will help release some of the risk." "In terms of semiconductor equipment, we expect fundamentals to weaken in the second half of 2025, with full-year WFE (wafer fabrication equipment spending) likely to be flat or decrease by a small single-digit percentage year-on-year (previous expectation was an increase of 5% year-on-year)."