To The Moon

🌟🌟🌟The biggest news for Semiconductor stocks this week is $Taiwan Semiconductor Manufacturing(TSM)$ .  TSMC's sales surged 45% due to AI Chip demand.    CEO CC Wei said that AI is so hot right now.

TSMC is the company behind the majority of the world's most advanced chips.  TSMC reported revenue of NT 256.95 billion, or USD 7.9 billion for July 2024, up 23.6% from June and up an impressive 44.7% from the previous year.  In June, TSMC reported its net revenue in May grew 30% year over year to USD 7.1 billion.  Sales from January through July amounted to NT 1,523.11 billion - up 30.5% from the same period last year.

In July TSMC beat analysts expectations for the 2nd quarter.  It reported revenue of USD 20.82 billion for fiscal 2024, up 40% from a  year ago.

TSMC's 2nd quarter business was supported by strong demand for the 3 nanometre and 5 nanometre technologies.  For the 3rd quarter, TSMC expects smartphone and AI related demand to drive business.  TSMC expects the 3rd quarter revenue to be between USD 22.4 billion and USD 23.2 billion.

Performance wise TSMC is up 1.5% on Friday and in the past 5 days, it has jumped 25%.  TSMC is now up 64% year todate and in 2023, TSMC has risen 77%. 

Wall Street Analysts are bullish on TSMC with a Buy rating, Target price of USD 184.30, an upside potential of 10%.

$NVIDIA Corp(NVDA)$  started off the week with its share price touching below USD 100 with the market sell off.  However Nvidia managed to recover and has risen 13% for the past 5 days.  Nonetheless Nvidia is still up 117% year todate.  Investors are also worried that CEO Jensen Huang has continued his summer of selling his Nvidia shares. He has now sold over USD 500 million worth of shares since the price peaked during an AI driven rise. 

Another negative news that hit Nvidia this week was the delay in delivery of its new Blackwell chips as the company grapple with design flaws.  TSMC uncovered the reported design flaw which affects the processor connecting 2 Blackwell GPUs on a single board.  Nvidia will now have to rework the design  before conducting further production tests with TSMC before it can move on to mass production. 

The delay in the Blackwell B200 chips could impact production targets, forcing some shipments to be pushed back to 2025.

Despite this setback, Nvidia is still the leader with 80% of the market share in AI chips.  Wall Street Analysts are still bullish on Nvidia with a Buy rating, Target price of USD 144.17, an upside potential of 37%.

$Advanced Micro Devices(AMD)$  has just reported an Excellent Q2 24 earnings beating analysts estimates thanks to record sales of processors for data centres on July 30.  AMD also forecast sales above targets for the current quarter.  

AMD earned an adjusted 69 cents a share on sales of USD 5.84 billion in the June quarter versus analysts expectations of 68 cents a share on sales of USD 5.72 billion.  On a year over year basis AMD earnings increased 19% while sales advanced 9%.

Data centre revenue jumped a huge 115% year over year to USD 2.83 billion.  AMD Instinct GPUs for AI applications drove the sales increase as well as strong growth in 4th Generation AMD Epyc server processors. 

Performance wise, AMD is down 1.5% on Friday but up 10% for the past 5 days.  AMD has dropped 3% year todate but was up 21% in 2023.

Wall Street Analysts are bullish on AMD with a Buy rating, Target price of USD 190.63, an upside potential of 42%.

$Intel(INTC)$  had the worst day in 50 years as its share price dropped 38% after a worst than expected  fiscal 4th quarter earnings report.   Intel also announced plans to cut around 15,000 employees.  On top of that, Intel eliminated its dividend for the quarter and reduce capital expenditure. 

Intel was sued on Wednesday by shareholders who said that Intel fraudulently concealed problems that led it to post weak results, slash jobs and suspend its dividends, causing its market value to sink more than USD 32 billion in a single day. 

Performance wise Intel has dropped 3.8% on Friday and is now down 58% year todate m. In 2023 Intel has plummeted by 42%.

Wall Street Analysts are mixed on Intel with a Target Price of USD 29.57, an upside potential of 50%.

$Direxion Daily Semiconductors Bull 3x Shares(SOXL)$  is up 9.6% for the week which is in line with the upside momentum of TSMC, Nvidia and AMD.   SOXL is a leveraged ETF that provides 300% of the performance of the NYSE Semiconductor Index.  

Is it time to Bargainhunt Semiconductor stocks? 

I believe that it is a definite YES.  Fundamentally nothing has changed for the key players.  Nvidia is still the leader with 80% of the market share of AI chips.  TSMC is still the largest foundry that makes advanced AI chips while AMD represents excellent value for money.  Intel has lots of work to do to play catch up with Nvidia and TSMC but it has received USD 6.6 billion in grants through the US Chips and Science Act. 

As the late Charlie Munger likes to say the Big Money is not in the Buying and Selling but in the Waiting.    He also said that the first rule of compounding is Never Interrupt It Unnessarily. 

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