Broadcom, Analog Devices Could Slide ~10%, Analyst Warns, But A Bottom Could Be Near

Semiconductors may power everything from Tesla Inc‘s TSLA cars to toothbrushes, but they can't outrun geopolitics.

With trade tensions heating up again, chip stocks have already taken a 25–30% hit, and JPMorgan analyst Harlan Sur says, “We see the potential for further ~10% downside (range of 5-15%) over the next six months.”

The good news? That may be the final flush before a rebound.

Tariffs Aren't The Problem – Demand Destruction Is

Despite investor jitters, Sur says the direct impact of tariffs on chipmakers is minimal. Most U.S.-designed chips are manufactured and tested abroad, not directly shipped into the U.S., shielding them from most tariff crossfire. Even China's retaliatory moves barely dent the sector directly.

Instead, the real problem lies in sticker shock. With end-products like smartphones and cars expected to rise 5–10% in price, consumers may start pulling back. A $300-more-expensive iPhone or a costlier EV could stall demand, ultimately hurting semiconductor sales.

Inventory caution from buyers only adds to the pressure.

2018 Called – It Wants Its Trade War Back

Sur points to the 2018 U.S.-China tariff battle as a cautionary tale. Back then, chipmakers were riding high—until trade tensions slammed the brakes on the upcycle. Demand weakened, earnings were revised down and stocks nosedived by up to 35%. Memory stocks were hit the hardest, while software-centric names like Synopsys proved more defensive.

Sur sees echoes of that pattern in 2025: stocks are selling off ahead of earnings cuts, which could help clear the air for recovery. If history repeats, a three-to-five-month drawdown followed by a Fed-assisted rebound isn't out of the question.

Broadcom, Analog Devices, KLA, Synopsis: Selective Is The Safe Play

In this storm, Sur's sticking with what held up last time. He favors Broadcom Inc AVGO, Analog Devices Inc ADI, KLA Corp KLAC and Synopsys Inc SNPS – stocks that blend strong fundamentals with exposure to AI, design software and increasing chip complexity.

These names outperformed during the 2018-2019 drawdown and are positioned to be more resilient this time around.

The bottom line?

Semiconductor stocks may not be done falling, but with earnings resets coming soon, the worst might be behind us.

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