To The Moon

#MarketTrends

Semiconductor Stocks: The Next Big Boom?

In 2023, Intel led the semiconductor industry with $51B revenue, despite a stock drop due to losses.

Nvidia followed closely at $49B, doubling its revenue from 2022 and reaching a trillion-dollar valuation.

However, 12 of the top 20 chipmakers, including Samsung and AMD, didn’t match their previous year’s revenues.

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The Insight: How To Find The Opportunities

Nvidia’s growth and trillion-dollar valuation highlight its potential as a strong investment.

Intel’s revenue leadership, despite stock decline, suggests a possible undervaluation.

Companies focusing on microprocessors for AI may offer long-term growth opportunities.

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#QuoteOfTheWeek

“Buy not on optimism, but on arithmetic." - Benjamin Graham

Successful investing requires a disciplined approach, focusing on hard data and financial metrics.

Evaluate a company’s intrinsic value through its earnings, assets, and liabilities, rather than speculative forecasts or market sentiment, to make informed decisions that stand the test of time.

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#What is happening recently?

Middle East Tensions Spark Market Chaos!

The escalating situation in the Middle East was a key driver of last week’s market volatility, with the S&P 500 having its worst day since January.

It will continue to be a situation to watch, with Israel vowing to retaliate with force after Iran sent a barrage of missiles towards the country over the weekend.

Oil in particular will remain in focus as the week goes on due to the situation in the Middle East, with fresh fears of inflation remaining sticky.

US CPI Numbers Crush Rate Cut Hopes!

Already last week's US CPI numbers have dashed investor hopes for a rate cut this year, with both headline and core CPI figures topping expectations. 

Some market analysts now say there is a case for another rate hike in the States, but the Bank of America still argues there will be rate cuts this year. 

It has revised expectations though, now pricing in two rate cuts, with the first to happen in September.

No Rate Cuts for Australia Until 2025?

What does this mean for Australia? Well the RBA is likely to look towards the Fed and it may delay its own rate-cutting plan as a result of sticky inflation.

 CBA CEO Matt Comyn said in February that rate cuts may be off the table until 2025 due to US inflation, so the high interest rate environment is unlikely to be changing anytime soon.

This has already had an impact on tech stocks, which are sensitive to the interest-rate environment. 

At start of trading on Monday, Tech led the laggards, driving the ASX200 down by 0.4% extending last week’s losses.

Copper Futures Hit Record High in Shanghai!

Copper futures trade at new record high. Copper futures in Shanghai printed a new record high, though prices in London and the US are still lower than their 2022 highs.

At the start of the year, analysts were optimistic about copper, and so far they seem to be right.

Analysts at Citi believe a new secular bull market in copper is now underway.

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Best Regards,

James Lim, SFA Founder

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