J.P.Morgan expects modest growth for the telecom equipment sector and challenges for semiconductors and payments in 2025 with a few potential exceptions
JPM says telecom equipment makers have potential to beat earnings estimates in 2025, as U.S. telcos stabilise their inventories and India invests in 5G
Nokia NOKIA might stand out from its non-telecoms businesses, JPM says, and upgrades it to "overweight" saying it is undervalued compared to earnings, unlike its peer Ericsson ("neutral")
JPM says orders of computer equipment makers like ASML or ASM International (both "overweight") will remain weak until the H2 of 2025, after chipmakers like Intel INTC cut spending this year
It selects ASMI as its top pick, and says the ASML stock may not perform until Intel's next CEO makes a decision over implementation of its top of the line High NA tool
With increased inventories, JPM recommends avoiding automotive exposed chipmakers like Infineon (N) and STMicroelectronics STMPA, which it downgrades to "neutral"
Instead, it prefers less exposed manufacturers like Nordic Semiconductor NOD ("overweight") or Soitec ("neutral")
It also sees the payments sector struggling with slower growth and debt refinancing, but puts Adyen ADYEN ("overweight") on a positive watch for short-term gains due to its potential to beat earnings expectations