Kim Bolton Reveals His Top Technology Stocks for June 2024

The S&P 500 Index has achieved its thirtieth record close of 2024, as of June 17, marking a remarkable 15 percent increase. Similarly, the Nasdaq 100 Composite has soared by 18.2 percent in just the first half of the year. This robust market performance is fueled by rising corporate profits, cooling inflation, the anticipation of an upcoming U.S. Federal Reserve easing cycle, historically low market volatility, a likely soft landing, and a significant rally in artificial intelligence (AI). Together, these factors have contributed to an additional $5.5 trillion in U.S. stock market capitalization. Analysts are continuously adjusting their price targets upward as bullish sentiment pervades the markets.

However, the question remains: will this momentum persist? Concerns about concentration risk are valid, particularly given the dominance of mega-cap stocks. Should the technology sector falter, it could have a broader market impact. The Magnificent Seven stocks account for two-thirds of the S&P 500's gains, highlighting the potential risk. Despite this, many argue for continued optimism, citing the successful strategies driving these gains. There's a belief that other companies have significant room for growth, which could sustain the rally. For instance, AI is expected to initiate a data center capital expenditure cycle that will surpass general-purpose data center spending in the coming years. As software becomes more pervasive, early adopters of AI applications and intelligence layers are likely to see both revenue and margin expansion.

Kim Bolton's Top Picks

Kim Bolton, president and portfolio manager at Black Swan Dexteritas, has highlighted his top stock picks: Infineon Technologies, Microchip Technology, and ON Semiconductor.

Infineon Technologies (IFNNY ADR)

Infineon Technologies is a leading semiconductor device manufacturer with operations spanning four key segments: automotive, green industrial power, power and sensor systems, and connected secure systems. Infineon is pivotal in the digital transformation of automated driving, anticipating increased semiconductor content per vehicle driven by advancements in automotive digitalization, including autonomous driving technologies. While the shift toward drivetrain electrification is progressing, automation is poised to be the next significant driver of semiconductor content in vehicles.

Microchip Technology (MCHP NASD)

Microchip Technology Incorporated specializes in developing, manufacturing, and selling smart, connected, and secure embedded control solutions across the Americas, Europe, and Asia. The company offers an extensive range of microcontrollers and microprocessors, analog and interface products, as well as FPGA products and services. Microchip's comprehensive portfolio supports diverse applications, reinforcing its position as a critical player in the embedded control market.

ON Semiconductor (ON NASD)

ON Semiconductor Corporation (onsemi) provides a broad array of intelligent power and sensing technologies. Its key products include power management solutions, sensors, and custom devices tailored for automotive, industrial, cloud, medical, and IoT applications. Notably, onsemi's portfolio features silicon carbide (SiC) power solutions, advanced imaging technologies, and energy-efficient power management systems for electric vehicles, industrial automation, and renewable energy sectors. Recently, onsemi introduced its next-generation analog and mixed-signal platform to enhance its intelligent power and sensing solutions. The company continues to drive innovation with record growth in its silicon carbide revenue and expanding applications in the automotive sector.

In summary, Kim Bolton's top picks reflect a strategic focus on companies leading the technological advancements in their respective fields. These selections underscore the significant potential within the technology sector, driven by ongoing innovations and expanding market applications.