To The Moon

🌟🌟🌟The Semiconductor stocks have fared badly this week. Is it time to get back into this sector?

$NVIDIA Corp(NVDA)$  led a broader sell off of the Magnificent 7 stocks  after news of Tesla and Google reported earnings that rattled the markets.   Nvidia is up today by just 0.6% but it fell 6% for the week.  However Nvidia is still up a massive 134% year todate and in 2023, Nvidia has skyrocketed 148%.

Nvidia has grown its business at an incredible pace.  Last quarter Nvidia's revenue surged 262% year over year to hit USD 26 billion.  Its earnings per share soared 629% compared to prior year.

Nvidia is famous for its Graphics Processing Units or GPUs which crunch AI workloads as these GPUs are the best in class by a wide margin and have been used by almost every company interested in AI.  Overall demand is very strong for its existing products such as H100 as well as H200.    The new  Blackwell GPU is also seeing strength in its bookings.  This specialised AI Chip enables connecting many GPUs so that large AI models can be trained with a smaller carbon footprint.

Not content to rest on its laurels, Nvidia will be launching Rubin GPU in late 2025.

Nvidia is due to report its Q2 24 earnings on August 28.

Wall Street Analysts are bullish on Nvidia with a Buy rating, an average Target price of USD 142.67, an upside potential of 26%.

$Advanced Micro Devices(AMD)$  is Nvidia's closest competitor on AI chips.  Even though Nvidia has a headstart in producing the specialised GPUs, AMD is gearing up to challenge Nvidia this year.

In December 2023, AMD unveiled its new MI300X AI GPU.  This chip is designed to compete with Nvidia's offerings with Microsoft and Meta Platforms signing on as customers. 

AMD is also diversifying its position in the market by expanding into AI powered personal computers.  According to a Canalys report 60% of all PCs shipped in 2027 will be  AI enabled.  If AMD can dominate the market with its AI PCs, it could see a significant boost to its revenue as the PC industry develops and demand going up.

Performance wise AMD shares was up 1% on Friday but is down 9% for the week.  It is just up 1% year todate but in 2023, AMD has risen by 27%.

Wall Street Analysts are bullish on AMD with a Buy rating, Average Target price of USD 196.48, an upside potential of 40%.

AMD is set to report its Q2 24 earnings on Tuesday July 30.

$Intel(INTC)$  is the biggest beneficiary of the US Chips Act with USD 8.5 Billion in direct funding and the option to receive federal loans of up to USD 11 billion.  The proposed funding will help Intel advance its commercial Semiconductor projects in Arizona, New Mexico, Ohio and Oregon.  Intel also has plans to invest more than USD 100 billion in the US over 5 years to expand its chip production capacity and capabilities and accelerate AI technologies. 

Intel is hoping that 2024 would be the trough year for operating losses in its struggling Foundry business.  Intel deepened an operating loss to USD 7 billion in 2023 from a loss of USD 5.2 billion in 2022 on a year over year revenue drop to USD 18.9 billion. 

Performance wise Intel is up 0.8% on Friday but is down 5% in the last week.  It has lost 34% year todate and in 2023, it dropped 8%.

Wall Street Analysts are bullish on Intel with a Buy rating, Average Target price of USD 39.80, an upside potential of 28%.

Intel is set to report its Q2 24 earnings on Thursday, August 1.

$Taiwan Semiconductor Manufacturing(TSM)$  has just reported its Q2 24 earnings on Thursday but its excellent results were overshadowed by reports on tougher export restrictions from the US government as well as comments from Donald Trump who said that Taiwan should pay for its own defence. 

For the 2nd quarter, TSMC saw its revenue soar almost 33% year over year to USD 20.8billion while its earnings came in at USD 1.48 per share up from USD 1.14 a year ago.  High performance computing which includes chips for AI represented 52% of its revenue for the quarter and was up 28% quarter over quarter. 

TSMC projected 3rd quarter revenue to be between USD 22.4 billion to USD 23.2 billion, representing 32% year over year growth and 9.5% growth sequentially. 

Performance wise TSMC is up 1% on Friday but down 2% for the week.  However TSMC has jumped 59% year todate and in 2023 it has risen 62%.

Wall Street Analysts are bullish on TSMC with a Buy rating, Average Target price of USD 184.30, an upside potential of 13%.

$Direxion Daily Semiconductors Bull 3x Shares(SOXL)$  is leveraged ETF that seeks 3 times the daily investment results of the performance of NYSE Semiconductor Index.  It is up 5.3% on Friday but is down 16% for the week reflecting the downward momentum of these key Semiconductor stocks.  However SOXL is up 26% year todate and in 2023 SOXL has jumped 67%.

I believe this week's dismal performance by the semiconductor stocks present an incredible opportunity to bargain hunt great semiconductor stocks.  I bought Nvidia at USD 115.00 and in fact it went down further to close at USD 113.06 on Friday. 

Nothing has changed for Nvidia fundamentally.  It is still the number Semiconductor company for AI chips with 80% of the market share and very profitable. 

Is it time to buy Semiconductor Stocks?  My answer is a YES especially Nvidia! 

Artificial Intelligence is still at its nascent stage and quality stocks like Nvidia will continue to grow exponentially in the future. 

As Warren Buffett likes to say When there is Fear in the markets it is time to be greedy. 

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