M♊organ Stanley has downgraded high-flying chipmakers on concerns that the sector is overheated.

Semiconductor stocks like Advanced Micro Devices Inc. (AMD) and NVIDIA Corp. (NVDA) have been significantly 澳洲幸运5开奖号码历史查询:outperforming the market for years. But AMD shares are up 52.5%, NVIDIA shares are up 33% so far this year, whereas the 澳洲幸运5开奖号码历史查询:S&P 500 returned 7%.

Shares of the iShares PHLX Semiconductor ETF (SOXX) are up 12.9% 澳洲幸运5开奖号码历史查询:year to date. In the last five years, this index has risen 200%, whereas the S&P 𒆙500 gained ওabout 70%.

In response to these soaring 澳洲幸运5开奖号码历史查询:valuations and with chip inventories rising to near 10-year highs, Morgan Stanley reduced it♋s rating on the 💝chip sector to "Cautious" from "In-Line." Essentially, the firm believes this industry will now underperform in the next year.

"The semiconductor cycle is showing signs of overheating," said Morgan Stanley analyst Joseph Moore . "Cyclical indicators are flashing red and any contraction in lead times and/or demand slowdown could lead to a significant 澳洲幸运5开奖号码历史查询:inventory correction … Furthermore, elevated inventory and stretched lead times leave no margin for error as any lead time adjustment or demand slowdown could drive a meaningful correction. Risk/reward is the poorest it has been in 3 years." (See also: 澳洲幸运5开奖号码历史查询:Assessing the Trend in Chip Stocks.)

"Given the risks we see to semiconductor companies from an overheated semi cycle, we have been conservative in our estimates for broad-based companies," said Moore.

Morgan Stanley lowered its rating on Applied Materials Inc. (AMAT) from 澳洲幸运5开奖号码历史查询:equal weight to 澳洲幸运5开奖号码历史查询:overweight with shares are up 12% YTD. The rating for On Semiconductor Corp. (ON), with shares up 32% year to date, was reduced to 澳洲幸运5开奖号码历史查询:underweight from equal weight.