All articles tagged with #semiconductor stocks
A market strategist warns that the AI-driven rally in stocks may be creating a bubble, especially as semiconductor stocks lag behind the broader market, and economic signals suggest a late-cycle phase with potential recession risks, indicating the rally could be unsustainable.
The Nasdaq 100 reached record highs, driven by strong service sector growth and gains in tech and semiconductor stocks. The S&P 500 and small caps also rallied, while commodities rebounded. The Bank of Canada cut interest rates as inflation slowed.
Nvidia's impressive quarterly earnings have positively impacted other semiconductor stocks, particularly Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing (TSMC). TSMC, which manufactures Nvidia's AI chips, saw a significant revenue boost and is expanding its production capacity to meet growing demand. AMD, while trailing Nvidia in AI chip market share, is also expected to benefit from TSMC's capacity expansion and could see substantial growth in AI revenue. Both TSMC and AMD are considered strong buys in the AI-driven market.
US stocks showed mixed performance as Nvidia's surge lifted chipmakers, while GameStop spiked and Moderna tumbled. Nvidia's shares rose over 6% due to Elon Musk's xAI plans, and Arm Holdings increased nearly 10% following a bullish note. The S&P 500 and tech sector were flat, while the Dow Jones fell 0.5%. Treasury yields rose, and U.S. home prices hit new highs. Oil prices increased, and Bitcoin fell 2.4%. Major movers included GameStop, Moderna, Norwegian Cruise Holdings, Celsius Holdings, HubSpot, and DraftKings.
ASML, a key developer of semiconductor manufacturing equipment, reported a 61% sequential drop in bookings for the first quarter, causing a downturn in semiconductor stocks. The company's CEO expects a stronger second half of 2024 as the industry recovers from the downturn, and anticipates increased orders from companies building foundries in the U.S. and government subsidies for chip factories to boost sales.
The intersection of artificial intelligence (AI) and semiconductor technology is driving dynamic shifts in the tech industry, with Micron Technology, Intel, and Broadcom highlighted as top stock picks among AI-focused semiconductor stocks. Intel is striving to catch up to competitors and has shown progress in achieving process technology leadership, while Micron benefits from the AI-driven boom in high-performance computing and offers a direct investment in the AI frenzy. Broadcom, a leading custom AI processor design house, is expected to generate a significant portion of its semiconductor sales from AI, making it a potential long-term game changer in the market.
The intersection of artificial intelligence (AI) and semiconductor technology is driving significant shifts in the tech industry. Three top semiconductor stocks to watch in this stage of the AI revolution are Micron Technology, Intel, and Broadcom. Intel is making strides to catch up in AI chip design and is investing heavily in process technology leadership. Micron benefits from the AI-driven boom in high-performance computing and offers a direct investment in the AI frenzy. Broadcom is a major player in custom AI processor design and is expected to generate a significant portion of its semiconductor sales from AI.
US stocks started the second quarter on a shaky note, with the S&P 500, Dow Jones, and Nasdaq all showing declines. The Personal Consumption Expenditures price index data has fueled hopes of rate cuts, with investors now betting on a June cut. Meanwhile, cocoa futures hit a record high due to severe weather in West Africa, United Airlines asked pilots to take unpaid time off amid Boeing delivery delays, and gold traded at new highs as investors anticipated rate cuts. Additionally, Apple's stock is down, and concerns are rising ahead of earnings season, while semiconductor stocks face potential challenges in April.
US stocks wobbled as the new quarter began, with the S&P 500 and Dow Jones falling while the Nasdaq rose slightly; investors are hopeful for rate cuts following a soft inflation gauge report, while United Airlines asked pilots to take time off due to Boeing delivery delays; gold prices surged on expectations of rate cuts, and Apple's stock is down amid concerns about declining sales and profits; as earnings season approaches, Wall Street analysts are more optimistic than companies, and semiconductor stocks face potential challenges in April; Alphabet's stock is underperforming, and the S&P 500 remains the best-performing major US index year to date.
Nvidia, Advanced Micro Devices (AMD), and Micron Technology are poised to benefit from the AI revolution as the demand for advanced semiconductors in data centers continues to grow. Nvidia's H100 and upcoming H200 GPUs are driving its data center revenue, while AMD's MI300 series targets both data center and personal computing AI applications. Micron's HBM3E memory solution is in high demand, powering Nvidia's new H200 and benefiting from the increasing AI chipsets in personal computers and smartphones. These companies are well-positioned to capitalize on the expanding AI market, making them attractive investment opportunities.
Wall Street analysts are bullish on semiconductor stocks Advanced Micro Devices (AMD) and Axcelis Technologies (ACLS) as alternatives to Nvidia. AMD is gaining traction in the data center market with its MI300 lineup, competing with Nvidia's AI processing units, and experiencing strong commercial demand for AI-enabled personal computers. Axcelis Technologies, a critical part of the chip fabrication process, is seeing increased demand from producers of silicon carbide power devices and AI-related semiconductors, with a record revenue in 2023 and a promising order backlog for 2024. Both stocks are considered attractive investment opportunities by analysts.
Cathie Wood, head of ARK Investment Management, warns of a potential market correction in semiconductor stocks as supply chain pressures ease, particularly for Nvidia. Wood notes that the easing lead times for GPUs suggest previous double and triple ordering due to shortages, which may lead to inventory digestion. Semiconductor stocks have been among the best-performing this year, with Nvidia's shares up around 80%, following a 240% gain in 2023.
Options trading in semiconductor stocks, driven by the AI market frenzy, has doubled in volume, with daily average notional volume exceeding $145 billion in February. Nvidia Corp. accounted for almost four-fifths of the trades, with its market value soaring and pulling the semiconductor index up by more than 23%. The rapid expansion in options trading may indicate investors playing catch up after missing out on last year’s rally, and options offer a way to bet on further gains in chip makers while providing protection if the rally slows down.
Advanced Micro Devices Inc. (AMD) has reached a market value of over $300 billion for the first time, marking a significant milestone in its impressive rise. The company's stock rose 9% in Thursday afternoon trading, reflecting its growing prominence in the semiconductor industry. AMD's surge is part of a broader trend in the booming chip market, with other semiconductor stocks also experiencing strong gains. This growth is fueled by increasing demand for AI-optimized servers, with companies like Dell reporting strong interest and orders for products featuring AMD's technology.
Japan's stock market reached a record high for the first time in 34 years, driven by strong gains in semiconductor stocks and a weaker yen benefiting exporters. The Nikkei index closed at 39,098.68 points, up 2.2%, and has been on a strong upward trend due to robust corporate earnings, currency dynamics, and foreign investor interest. The rally is also supported by optimism around corporate governance reforms and foreign inflows, with Japanese technology companies showing promise amid growing demand for AI.