Tech 2025 Outlook: IG & HY Picks and Pans

• • In Part 3 of our Tech 2025 Outlook, we discuss various companies within our IG and HY coverage, curve preference notably 10s30s, and provide updates. Part 1 covered key themes and fundamental views across various subsectors, while Part 2 focused on sector dynamics, issuance expectations, and M&A activity.
  • Arrow Electronics is expected to benefit from a recovery in analog/embedded demand, with improved cash conversion as excess inventory is managed.
  • . NXP Semiconductors is anticipated to see a stabilization in automotive chip demand, with potential growth starting in the second half of 2025.

Gen Digital may face challenges due to tight spreads and potentially up to $2 billion in new issues next year for a pending acquisition and refinancing an upcoming maturity.

Highlighted companies include Amazon, Lam Research, and Texas Instruments among A-rated entities, with Apple noted as having challenges. Within the BBB-rated category, Arrow Electronics and Kyndryl are emphasized, while Intel and Fidelity National Information Services face headwinds.

For BB/B-rated entities, Twilio and Western Digital are highlighted, with Gen Digital and Xerox facing potential difficulties. Amazon continues to show positive operating trends, reinforcing confidence in its long-term business strategy under CEO Andy Jassy.