To The Moon

🌟🌟🌟It is scary time today to see the massive sell off in Tech stocks especially the Semiconductor Stocks which were the worst hit.    This is the worst daily performance in over 4 years for the semiconductor sector.

What happened?

President Biden reportedly told its allies in Japan and Netherlands that he may invoke the Foreign Direct Product Rule to limit sales to China.  This would allow the US to impose controls on any company that even uses a tiny amount of US technology. 

Then Donald Trump told Bloomberg Businessweek in an interview that Taiwan should have to pay for its own defence.

Taiwan is home to $Taiwan Semiconductor Manufacturing(TSM)$  who is the main contract microchip supplier to Nvidia, AMD, Microsoft, Google and many other Big Tech.  TSMC's share price was badly hit as it slumped by 7.9% on Wednesday.

TSMC is due to report its earnings result on Thursday and this negative news may greatly impact  TSMC's share price. 

TSMC share price has now dropped 11% for the past 5 days but it is still up 68% year todate. 

Wall Street Analysts are bullish on TSMC with a Buy rating, Target price of USD 184.30, an upside potential of 7%.

$NVIDIA Corp(NVDA)$  fell 6.6% on Wednesday but fundamentally nothing has changed for Nvidia.  With AI demand remaining robust and the  Generative AI deployment still at its nascent stage, Nvidia is  the number 1 leader in this segment.  The upside momentum of Nvidia 's Blackwell AI accelerator systems have not hit yet too. 

Nvidia has been riding on a rally fueled by its outsized earnings and valuations.  Nvidia is now down 13% for the past 5 trading days but still up 144% year todate.

Wall Street Analysts are still Bullish on Nvidia with a Buy rating, Average Target price of USD 140.85, an upside potential of 18%.

$Advanced Micro Devices(AMD)$  dropped 10% on Wednesday, the worst among the leading Semiconductor stocks.  On July 10, AMD announced that it would acquire Silo AI.  The purchase will cost AMD USD 665 million.  This investment will bring Europe 's largest AI laboratory under AMD' s control.  Silo AI's mission is to help organisations implement the most advanced AI technology.  This acquisition of Silo AI will also help bolster AMD 's MI300 series of accelerators, improving its chances of keeping pace with Nvidia and other competitors. 

Wall Street Analysts are bullish on AMD with a Buy rating, Target price of 191.62, an upside potential of 20%.

$Intel(INTC)$  is the only Semiconductor stock that did not fall today but instead rose 0.3%.  

On June 4 at the Computex Event in Taiwan, Intel unveiled the Intel Xeon 6 processors with Efficient cores that will deliver great performance and power efficiency for high density workloads in data centre.  Intel also announced the pricing for Intel Gaudi 2 and Gaudi 3 AI accelerator kits, delivering high performance with up to one third lower cost compared to competitive platforms.  The combination of Xeon processors with Gaudi AI accelerators in a system offers a powerful solution for making AI faster, cheaper and more accessible. 

Intel also unveiled the Lunar Lake client processor architecture to grow the AI PC category.  The next generation of AI PCs will deliver up to 40% lower system on chip power when compared to previous generation. 

Intel is also a major beneficiary of the US Chips Act with USD 8.5 Billion for its Semiconductor projects.  On top of that Intel could receive another additional USD 11 billion in loans from the Chips Act. 

Wall Street Analysts are bullish on Intel with a Buy rating, Target price of USD 38.02, an upside potential of 11%.

$Direxion Daily Semiconductors Bull 3x Shares(SOXL)$  dropped a massive 21% on Wednesday.  It is a leveraged ETF that seek a return of 300% the performance of NYSE Semiconductor Index.    However SOXL is still up 83% year todate. 

Semiconductors are essential components in our every day lives, not just required in AI machine learning.   There are thousands of products such as computers, smartphones, appliances, gaming hardware, medical equipment, EVs that use Semiconductors.  It is times like this when these key Semiconductor stocks are on sale that we need to take action and buy.   It takes courage to do so but the rewards are great long term. 

I did this morning and bought Nvidia as I believe that it has huge exponential growth ahead.  

As Warren Buffett likes to say When there is fear in the markets it is time to be greedy.  Buy Wonderful Companies like Nvidia and TSMC at Fair prices and my favourite holding period is Forever! 

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