Recently, the semiconductor sector has seen a pretty big change. Chip stocks were among the worst performers last year, with the iShares Semiconductor ETF (SOXX) shedding more than 35% in value. But the sector has quietly recouped those losses, with the index up nearly 50% from its October low, outperforming major US indexes. Even so, chip stocks have been somewhat under the radar since the start of the year as rumors of artificial intelligence and a Big Tech recovery caught investor attention. While the semiconductor sector is known for its cyclicality and boom cycles, some Wall Street experts are urging investors to take a longer-term view. “We might be a bit ‘dead money’ for the medium-term type of trader, but in the long run you’re really betting that the fundamentals in the second half of 2023 and then 2024 will be. really a much better one,” Eric Ross, chief strategist at Cascend Securities, told CNBC’s “Street Signs Asia” earlier this month. AI plays Kenny Polcari, chief market strategist at SlateStone Wealth, who likes Nvidia for its strength in the semiconductor sector and says the stock is a game for AI. It comes as rumors around artificial intelligence have been sparked following the viral success of ChatGPT — an AI chatbot developed by Microsoft-backed OpenAI. “I think you really have to consider the role that AI is going to play but hasn’t played so far. It made this quantum leap almost overnight. I think that puts it in place. front and center in everyone’s portfolio,” said Polcari. Altimeter Capital Chairman and CEO Brad Gerstner agrees. “We’ve long admired Nvidia, leader Jensen, and their central role in AI,” Gerstner said Thursday on CNBC’s “Mid-Time Report.” “During the past two years, we’ve seen tremendous acceleration, as evidenced by OpenAI and the work that Microsoft is doing, what Google is doing, etc.” Sylvia Jablonski, CEO at Defiance ETFs, called Nvidia, Advanced Micro Devices and NXP Semiconductors “data center leaders” and said the companies would “power the engine” of AI. Meanwhile, opportunities in Asia UBS sees many emerging opportunities in Asia’s semiconductor industry. Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note on Friday: “We think Asia’s leading semiconductor companies are poised to drive public outperformance in the public sector. Asian technology in the next 6-12 months. “In this area, we support leading memory chip manufacturers, foundries and select fables chip designers.” UBS said margins in the Asian semi-finals are likely to recover as supply-demand dynamics improve in the second half, while the outlook for earnings growth next year also looks positive. Rand Wrighton, head of international equities at Barrow Hanley Global Investors, is a fan of South Korean chipmaker SK Hynix and Taiwan’s Mediatek. “Hynix is looking to reduce investment by more than 50%. That’s usually what you see when you bottom out, and we think in the second half of the year you’ll see an improvement trend in both smartphones and servers. PC, into a position where the stock moves quickly, when those green shoots really show up,” Wrighton told CNBC’s “Street Signs Asia” on Monday. European Stock Ideas In Europe, a range of chip stocks have made it to Bank of America’s list of “Europe’s Best Stock Ideas for 2023”. Bank of America analysts, led by Didler Scemama, wrote on Feb. 7: “We think investors should position themselves for the semi-finals to outperform the stock market. broader three to six months before fundamentals change in the third quarter of 23.” will benefit from enduring themes such as remanufacturing and accelerating electrification and digitization. Bank of America’s top pick is ASM International. It also has buy orders on ASML and STMicroelectronics. – Michael Bloom of CNBC contributed to the report