As is well known, the Bible says that the last will be first and vice versa. Accordingly, the high-flyers from the technology industry from 2023 started the 2024 stock market year weakly.
This also applied to Infineon (WKN: 623100 / ISIN: DE0006231004). However, this does not mean that the semiconductor stock has no potential after some initial profit-taking.
Infineon shares have room for improvement
The German leading index DAX ended the 2023 stock market year with a price increase of just over 20 percent. New highs were reached, while the 17,000 point mark was exceeded for the first time.
Given such positive developments, investors are wondering which index representatives still have room for improvement. With a share price increase of around 33 percent, Infineon was high on the performance list last year, but unlike the DAX, the semiconductor stock is well below its record level.
This dates back to the time of the dot-com bubble and is priced at 93.60 euros. This is likely to be difficult to achieve, but there is still some room even for the 2023 annual high of 40.25 euros and the interim high from 2021 at 43.40 euros.
Light and shadow
A sustained positive development in the operating business should also further boost the share price. Infineon was able to achieve record sales and earnings in the past 2022/23 financial year (end of September). Further sales growth to 17 billion euros with a segment result margin of 24 percent is expected for 2023/24. The semiconductor company also wants to benefit from the boom surrounding this topic AI applications benefit.
However, Bayern are not in an easy environment. While continued strong growth in demand was observed in the areas of renewable energies, electromobility – especially in China – and microcontrollers for the automotive industry, areas such as consumer, communications, computing and IoT applications experienced “a temporary low in demand”, according to the company.
My conclusion
Long-term digitalization trends should benefit semiconductor companies like Infineon, even if some areas are currently experiencing a low. This is nothing unusual for the already very cyclical semiconductor business.
If you want to bet on several promising representatives of the semiconductor industry, you can take a look at this Index certificate on the Chip Power Index (WKN: DA0ABM / ISIN: DE000DA0ABM7) throw. Next to Infineon US industry giants such as NVIDIA, Intel and AMD are also represented in this index.
The post Infineon: The next attempt first appeared on market INSIGHTS.Continue to the full article at Marc O. Schmidt