To The Moon

🌟🌟🌟On a day when there is a sea of red, $Intel(INTC)$  fell 26% on Friday after the release of disappointing earnings results.  Intel is now down 31% for the past 5 days and has plummeted 55% year todate.  In 2023, Intel has dropped 37%.

What happened to cause Intel's share price to crater so badly?

First of all the US job growth slowed sharply in July and the unemployment rate rose to its highest level since 2021.  The unemployment rate rose to 4.3% - its highest level in almost 3 years.  The Cboe Volatility Index, Wall Sstreet's Fear gauge closed at its highest level of the year.

Intel has struggled to gain a foothold in the market for AI chips that have driven the sales and valuation of Nvidia and its competitors.  The heavy spending on those AI focused chips to build big data centres has cut into demand for non AI processors for data centres that have been central to Intel's business.

Intel reported a loss of USD 1.6 billion for the 2nd quarter, compared with a USD 1.5 billion profit a year earlier.  Intel said that it expected sales of USD 13 billion in Q3 24, which is below analysts expectations. 

Intel also said that it would pause its dividends this quarter, following a 66% reduction of the payouts last February.

Intel plans to lay off 15,000 people, most of them by the end of 2024.  CEO Pat Gelsinger said that costs were too high and profit margins too low.  Bolder action was needed to address these issues and a 2nd half looks tougher than expected.

In contrast $Advanced Micro Devices(AMD)$  has just reported an excellent Q4 24 earnings report.  AMD has beaten Wall Street expectations for revenue and showed continued growth in the sales of its AI chips.

AMD 's earnings per share was 69 cents versus 68 cents expected.  AMD' s revenue was USD 5.84 billion versus USD 5.72 billion expected.

AMD reported Net Income of USD 265 million or 16 cents per share compared to a Net Income of USD 27 million or 2 cents per share in the previous year quarter. 

AMD rose 8% in extended trading on Tuesday July 30, but has since dropped 6% this week due to the general market Bearish sentiments.

AMD's shares are now down 4% year todate but in 2023, it has risen 21%.  Investors would like to see AMD take away some market share from its long time rival Nvidia with its MI300 chips and to show growth in its data centre AI business.  In Q2 24 AMD's revenue from its MI 300 chips exceeded USD 1 billion.  CEO Lisa Su said that AMD now expects its data centre GPU revenue to exceed USD 4.5 billion as its AI chip sales soared 115% year over year to USD 2.8 billion.

$NVIDIA Corp(NVDA)$  was not spared from the market selloff this week as its shares dropped 5% for the week.  However Nvidia is still up 122% year todate.

Nvidia's shares have been on a wild Wall Street ride this week.  Nvidia added a record USD 329 billion in 1 single day gain compared to the previous record of USD 277 billion earlier this year just 2 days ago.

Nvidia had a sterling Q1 24 earnings as sales grew 262% to USD 26 billion while earnings of USD 6.12 per share were 461% higher.

However on Thursday there were reports that the US Department of Justice is investigating its acquisition of Run.ai, an AI start up.   Nvidia's practices in selling multiple AI chips to cloud providers is also under scrutiny.

I last bought Nvidia when it was trading at USD 115, but it has since fallen to USD 107.27.  I believe that this is a fantastic opportunity to buy more Nvidia as it is a leader in the AI Chip sector with 80% of the market share.

$Taiwan Semiconductor Manufacturing(TSM)$  also dropped 5% on Friday and in the last 5 days, TSMC is now down 7%.  However it is still up 47% year todate.  In 2023 TSMC is up 56%.

TSMC's share price was negatively impacted when Donald Trump said that Taiwan should be paying the US to defend it in July. However TSMC posted Q2 24 results that beat expectations amid surging demand for AI chips.   TSMC reported revenue that was 40% higher than a year ago to NT 673.51 billion while net income increased 36% to NT 247.85 compared to previous year.

TSMC earnings increased 31% while sales rose 35% on a year over year basis.

TSMC is the world's largest Semiconductor Foundry company, leading the industry with advanced process technology and count many leading Chips companies like Nvidia and AMD as its customers.

It is not surprising that $Direxion Daily Semiconductors Bull 3x Shares(SOXL)$  fell 16% on Friday as it is a leveraged ETF that provides 3 times the performance of the NYSE Semiconductor Index.  It is now down 32% for the week.  It is not advisable to hold SOXL long term due to its compounding nature as its results may be skewed. 

Semiconductors are the picks and shovels of the AI revolution which is only at its nascent stage.  This sell off in the current Bear Market offers an unprecedented opportunity to buy exceptional companies like Nvidia and hold long term. 

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

@Daily_Discussion  @TigerStars  @Tiger_comments  @MillionaireTiger  @CaptainTiger