To The Moon

🌟🌟🌟Geopolitical conflicts and higher for longer interest rates by the Feds caused the markets to turn Bearish this week.  Semiconductor stocks were among the worst hit with $NVIDIA Corp(NVDA)$  dropping 10% on Friday, $Advanced Micro Devices(AMD)$  losing 5.4% while $Taiwan Semiconductor Manufacturing(TSM)$  fell 3.4% and $Intel(INTC)$  dropped 2.4%.  $Semiconductor Bull 3X Shares(SOXL)$  which provides Bullish Bet on  3x  daily exposure to 30 of the largest US listed Semiconductor companies also fell 11%.

Demand concerns were weighing on semiconductor stocks after TSMC, the world's largest maker of advanced chips scaled its expectations for 2024 Semiconductor market growth this year to just 10% on consumer weakness. 

On Wednesday ASML, a key developer of semiconductor manufacturing equipment said that bookings fell by 61% during Q1 24, a steeper drop than investors had expected.  ASML fell over 7% that day which led to a drop in other Semiconductor stocks as well.

ASML is the only supplier of machines that are needed to build the most advanced chips in the world.  Its Top 2 customers TSMC and Samsung accounted for over half of its 2023 sales.

On the bright side, the US Chips and Science Act would boost ASML sales.  The biggest beneficiary of the Chips and Science Act is Intel as it secures the largest direct  funding of USD 8.5  Billion for its commercial Semiconductor projects on March 20 2024.  Intel could also receive up to USD 11 billion on loans on the Chips Act.

Intel said that it would spend its Chips Act fuds on Fabs and research centres in Arizona, Ohio, New Mexico and Oregon.

TSMC is also expected to receive USD 6.6 billion for a fab in Arizona that will be used for Apple and AMD chips. 

Nvidia has been the best performing semiconductor stock this year breaking records as the largest single day market cap gain of USD 277 billion on February 22.  It hit USD 2 Trillion in market capitalisation.  But the Tech sell off on Friday led by Nvidia made it its worst single day since March 2020.  Nvidia 's market cap has now slid to USD 1.90 Trillion.

From a high of USD 974, Nvidia closed at USD 762.00 on Friday. 

However the core fundamentals of Nvidia have not changed.  It is still a profitable company with a dominant position as the Number 1 Semiconductor company for its specialised AI chips. 

At Nvidia's 2024 GTC AI conference, Nvidia released the much anticipated Blackwell, the World 's most powerful chip.  CEO Jensen Huang said that "Generative AI is the defining technology of our time.  Blackwell is the engine to power this new industrial revolution".

Jensen Huang also said that Blackwell will be the most successful product launch in Nvidia 's history.  Nvidia said that Amazon Web Services, Dell Technologies, Google, Meta, Microsoft, Open AI and Tesla plan to use Blackwell GPUs.

In other news on Tuesday, AMD has unveiled new processors to power AI enabled PCs as it seeks to gain leadership in the AI PC race against rivals like Nvidia and Intel. 

AI PCs are personal computers equipped with processors designed to perform AI tasks such  as real time language translation and summarisation.

AMD said that the Ryzen Pro 8040 series processors for laptops and Ryzen Pro 8000 series processors for desktops are built with the advanced 4 nanometer technology. 

Artificial Intelligence is still at its nascent stage and there will be lots of exponential growth ahead.  Semiconductors are the core components required to power AI now and in the future.

The current sell off in semiconductor stocks is a great time to bargain hunt Chips Giants like Nvidia, AMD, TSMC and Intel and hold long term.    It takes courage and faith to look past the current sell off as a golden opportunity to buy these stocks. 

As Warren Buffett likes to say When there is fear in the markets it is time to be greedy.  That time is NOW!

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