By Tae Kim

Susquehanna analyst Christopher Rolland is becoming less optimistic on semiconductor stocks due to uncertainty over trade policy.

The analyst suspects investors may not reward good guidance or solid numbers when chip companies report their first-quarter results starting this week.

"Despite modest 1Q strength from tariff-related pull-ins and a budding recovery, tariff volatility casts doubt on 2Q and 2H25 guidance," he wrote in a note Monday.

Rolland expects fears about tariffs from China and U.S. will hang over the sector, hitting both imports and exports.

Earlier this month, the Trump administration announced exemptions for some imported tech hardware products -- including smartphones, computers, and other items -- from so-called reciprocal tariffs of 145% on China imports. However, chips and electronics are expected to be covered under a new sector tariff that will be announced in the coming weeks, officials said that weekend.

"While there may be some early signs of green shoots in Industrial, risk of a tariff-related 2H recession may stall this recovery," Rolland wrote.

As a result, the analyst cut his forecasts for several names.

He lowered his price targets for Texas Instruments to $220 from $240, Microchip to $60 from $70, and Qorvo to $65 from $90, respectively. He has Positive ratings for Texas Instruments and Microchip, along with a Neutral rating for Qorvo. Texas Instruments is expected to report earnings on Wednesday, and Qorvo on April 29.

In early trading Monday, Texas Instruments shares fell 2.8%, Microchip stock dropped 1.2%, Qorvo declined 1.2% and the iShares Semiconductor exchange-traded fund fell 2.8%.

Write to Tae Kim at tae.kim@barrons.com

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April 21, 2025 12:32 ET (16:32 GMT)

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