STMicroelectronics and Prysmian hit hard by the sell-off in the tech sector

(Il Sole 24 Ore Radiocor) - The sell-off in tech and chip shares is also being felt on the Milan Stock Exchange, causing shares in STMicroelectronics and Prysmian to slip. That said, these are two shares that have risen sharply since the start of the year: the former by 123 per cent and Prysmian by almost 40 per cent. Both companies have benefited from the AI boom, providing the infrastructure necessary for the development of the technology: chips in the case of the former, and fibre-optic cables for power transmission in the case of the latter. Demand for infrastructure supporting artificial intelligence will remain high, as indicated in recent days by the top executives of the Dutch firm ASML and the Taiwanese firm TSMC. Investors, however, are questioning the valuations reached by these shares, at a time when liquidity is being heavily absorbed by transactions such as SpaceX’s massive IPO in June, bond issues and potential IPOs by other companies in the sector.

Andrea Scauri, fund manager at Lemanik, has indicated that AI will remain a key theme, although it will need to be approached selectively. In the fund manager’s view, STMicroelectronics, Prysmian and Technoprobe are promising stocks. “Our favourite stocks are STMicroelectronics, Prysmian and Technoprobe, in order of preference,” he explained, whilst advising caution over the summer, in a context characterised by lower liquidity, growing uncertainty ahead of the US mid-term elections and an increase in the supply of shares from companies exposed to the artificial intelligence sector.