Goldman Sachs cut the earnings estimates across the chip and chip-equipment sector on Monday, citing a "more challenging macro backdrop." Here's what the firm did: Downgraded shares of Microchip Technology , Qorvo and Teradyne to neutral from buy. Removed AMD from its conviction buy list. Cut the EPS estimates for the next three years on Intel, AMD and various other chip companies. Maintained sell ratings on Intel, Texas Instruments and various other chip stocks. Upgraded KLA Corp . to buy, seeing it as potential outperformer. Maintained its earnings estimates on Nvidia , noting that it had already accounted for economic concerns in its update in early March. Goldman's overall concern is that it believes overall economic growth is set to slow because of rising inflation and rates. "Semiconductor market growth has historically correlated with global GDP given its exposure to consumer spending (on smartphones, PCs, cars, and other consumer products/devices) as well as enterprise IT spending (on server/compute, networking, and storage applications)," Goldman analysts wrote. "While semiconductor industry revenue has rebounded sharply off the lows in 2Q20 partially supported by an accommodating fiscal and monetary policy environment, looking ahead, we now expect a more challenging backdrop with our economists forecasting 1) rising inflation, 2) higher interest rates, and 3) ultimately, a moderation in global GDP growth from 6.3% in 2021 to 3.2% in 2022," they added. The iShares Semiconductor ETF was down 10.5% this year heading into this week, more than double the loss of the S & P 500 on concerns about the economy.
Lisa Su, president and CEO of AMD, during an interview with Mad Money, broadcasting from CNBC's San Francisco bureau on November 21, 2019.
Jacob Jimenez | CNBC
Goldman Sachs cut the earnings estimates across the chip and chip-equipment sector on Monday, citing a "more challenging macro backdrop."