To The Moon

🌟🌟🌟It has been an action packed week with the US markets closing on a high note on Friday led by Big Tech.  Semiconductor stocks have done well led by star performer $NVIDIA Corp(NVDA)$  up 6% today and in the past 5 days it has risen 12%.  Nvidia  has jumped 82% year todate and in 2023 it was up a whopping 222%.

It has been an epic year for Nvidia as its share price has been sizzling hot.  This is due to its specialised AI chips which are  in high demand.   Nvidia holds more than 95% market share in workstation Graphics Processing Units (GPUs), 94% market share in data center GPUs and more than 80% market share in AI processors. 

Nvidia has announced several new products at its annual GPU Technology Conference in March.  The headline announcement was its latest GPU architecture named Blackwell.  CEO Jensen Huang said that Generative AI is the defining technology of our time and Blackwell is the engine to power this new industrial revolution. 

Nvidia had reported an impressive Q423 earnings report which crushed Wall Street Analysts expectations.  Revenue climbed 265% to USD 22.1 billion, Non GAAP Net Income soared 486% to USD 5.16 per diluted share. 

Nvidia is set to report its Q1 24 earnings on May 22.  Wall Street Analysts expectations are high once again on Nvidia.   41 Analysts are bullish on Nvidia with a Buy rating, average Target price of USD 1004.92, an upside potential of 14% according to Tipranks. 

$Advanced Micro Devices(AMD)$  has also risen this week.  AMD is up 2.3% on Friday and in the past 5 days it has risen 6.3%.  AMD is now up 13% year todate and in 2023 it has jumped 80%.  AMD is Nvidia's closest competitor in AI chips.  AMD has unveiled the Instinct MI300X accelerator and the Instinct MI300A accelerated processing unit (APU) which AMD said works to train and run LLMs.  MI300X has 1.5 times more memory capacity than previous MI250X version.  Both new products have better memory capacity and are more energy efficient than their predecessors according to AMD. 

AMD is set to report its Q1 24 earnings on April 30 2024.  AMD has guided adjusted revenues of between USD 5.1 billion and USD 5.7 billion for the quarter.  This translates to 7% growth compared to last year.  AMD has guided gross margin of 52% for the year, marking a 200 basis point increase compared to last year.   This quarter in 2024 is likely to see AMD benefit from an improving PC market and higher demand for AI chips. 

Wall Street Analysts are bullish on AMD with a Buy rating, Target price of USD 202.93, an upside potential of 28% according to Tipranks. 

$Taiwan Semiconductor Manufacturing(TSM)$  had a great week.  Its share price is up 1.2% today and in the past 5 days, it has jumped 9%.  TSMC has now risen 36% year todate and is up 65% in 2023.

TSMC's shares tumbled 6.7% last Friday following its Q1 24 earnings report in which it lowered its expectations for chip sector growth and did not revise up its capital spending plans.  This was contrary to Wall Street Analysts expectations. 

However TSMC beats revenue and profit expectations in Q1 24, thanks to strong demand for its advanced chips, especially those used in AI applications. 

Net Revenue rose 16.5% from a year ago to NT 592.64 billion while net income increases 8.9% from a year ago to NT 225.49 billion. 

TSMC is the world's largest producer of advanced processors and counts Nvidia, AMD and Apple as its clients. 

Wall Street Analysts are bullish on TSMC with a Buy rating, Target price of USD 154.14, an upside potential of 11%.

$Intel(INTC)$  had a bad week in  contrast to its competitors.  Intel is down 9.2% and has dropped 7% in the past week.  Intel is down 33% year todate but in 2023 it is still up 6.7%.

Intel has just reported its Q1 24 earnings on Thursday that beat Wall Street expectations for earnings per share but came up light on sales.  It also gave a weak forecast for the current quarter. 

Intel's earnings per share was 18 cents versus 14 cents expected.  However revenue was USD 12.72 billion versus USD 12.78 billion expected. 

For the 2nd quarter, Intel expects earnings of 10 cents per share on revenue of USD 13 billion.  That forecast compares to analysts expected earnings of 25 cents on USD 13.57 billion in sales. 

In Q1 24 Intel reported a net loss of USD 400 million or 9 cents per share versus a loss of USD 2.8 billion or 66 cents per share last year. 

However CEO Pat Gelsinger told investors on an earnings call, to focus on Intel 's long term potential.  Intel said that it would release a new AI processor for servers called Gaudi 3.  This is intended to compete against Nvidia' s popular GPUs, although it is not ready for shipping until later this year.  Intel said that it expected more than USD 500 million in sales from its Gaudi chips in the 2nd half of 2024.

Intel is the biggest beneficiary of the US Chips and Science Act of 2022.  It is receiving USD 20 billion in grants and loans to help finance the expansion of its production capacity in the US. 

Wall Street Analysts are bullish on Intel with a Buy rating, Target price of USD 44.17, an upside potential of 38%.

$Semiconductor Bull 3X Shares(SOXL)$  is a good short term tactical strategy to capture the upside potential of these 4 major Semiconductor stocks.  SOXL seeks daily investment results of 300 times of the performance of the NYSE Semiconductor Index.  However SOXL is not suitable for long term hold due to its compounding nature.  

The expense ratio is 1.03%.    SOXL is a lot simpler way than using Options Strategies which are more complex.  Investors can only lose up to the original amount invested while on Options Trading, it is possible to lose much more. 

Semiconductors are the picks and shovels of the AI revolution since they are the core components required in machine learning.  Nvidia, AMD, TSMC and Intel are set to grow exponentially in the future.  So whenever there is a downward trend in the markets, it is a great way to buy and accumulate these stocks for the long term. 

As Warren Buffett likes to say Buy Wonderful Companies at Fair Price and his favourite holding period is Forever. 

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