Is now the time to aim due to major market adjustments? What are Wall Street's carefully selected semiconductor stocks for “The Great Strike Back”
Investors who are skeptical about AI earnings forecasts have warned that there is a bubble in popular AI-related stocks, especially semiconductor stocks that have continued to benefit from the AI boom that will expand globally since 2023. Currently, adjustments to global semiconductor stocks have been completed, and ahead of NVIDIA's important financial results announcements,The valuation of AI-related stocks has also returned to a relatively reasonable levelSo, high tech bulliesMost of the “AI bubble” has been resolved with this adjustmentI am convinced (in other words, it is said that AI-related stocks whose business models can generate almost no profit even though they piggyback on the AI boom have almost been eliminated due to the current decline). In the market, high-tech companies that can make profits sustainably amidst the AI boomEntering a new “updraft” surgeThat is expected. While selecting the bullish players in semiconductor stocks“The time has come to return to the field of artificial intelligence (AI) again”I'm thinking about it.
Global capital has already begun to return to high-tech stocks, particularly AI semiconductor stocks, and these stocks are showing clear signs of a rebound. Above all, it has a monopoly on AI chips for data centers $NVIDIA (NVDA.US)$Stocks start at August lowsSudden backlash of 17% or moreI did it.
In fact, the crash of the past few weeksIt is attracting a large number of investors aiming to push forward. From hedge funds to individual investors, many industry players are still looking forward to the long-term development of artificial intelligence (AI).I'm trying to build a position before NVIDIA's financial results announcement on 8/28. particularly“YOLO” investors-- Active investors with an investment philosophy called “You Only Live Once” (You Only Live Once) -- have recently been buying popular semiconductor stocks on a large scale to benefit from AI after '23. “YOLO” investors say semiconductor stocks like NVIDIA will benefit from AI such as NVIDIA due to this adjustmentA “once-in-a-lifetime chance” to buy cheaplyThey seem to be betting that it will happen.
Ivanana Delevska, founder and chief investment officer of Spear Invest, said”Now that technical selling pressure has subsided, fundamentals are being emphasized again” he said.
Also, $CBOE Volatility S&P 500 Index (.VIX.US)$Based on the data correlation between option adjustment spreads for the Bloomberg US corporate bond index, when VIX approached 39 last week, the corporate bond spread (yield difference between corporate bonds and risk-free bonds, usually US bonds) should have been 3.5%. However, the spread fell far short of expectations and remained at 1.32%. Who are Bloomberg's strategistsThis difference suggests that recent market declines are technical and do not mean economic collapseThey say they are doing it. In fact, this kind of divergence in the pastIt will bring above average returns to the stock market over the next 3 to 6 monthsThere are a lot of things.
BofA analysts alsoA rebound in semiconductor stocks can be expected in the fourth quarter when seasonal headwinds abateIt says that. Looking back on past history, he pointed out that there is a possibility that the Philadelphia Semiconductor Index (SOX) will turn into a rebound from October. Since 2010, the average return for the fourth quarter and first quarter of the same index7% to 10.5%So,Approximately 400 basis points higher than the S&P 500。
After the crash on 8/5, major Wall Street banks such as Bank of America, Citi, JP Morgan, and Piper Sandler took the leadWe recommend semiconductor stocks and select “top hot picks”I did it. Above all, NVIDIA is recommended by most major banks, and Micron Technology starts with target stock pricesApproximately 68%There is room for higher prices.
● The oligopoly of the DRAM market is underway, and City has selected Micron as a “top pick”!
City is in response to recent sales and showering, $Micron Technology (MU.US)$to other companiesThe time has come to strengthen investmentsI pointed it out,Micron a “top pick”I'm choosing it. The oligopoly of the DRAM market has progressed, and it is expected that it will continue to be tight. AMD, Broadcom, $Analog Devices (ADI.US)$、 $Microchip Technology (MCHP.US)$“Buying” is also being evaluated for stocks such as, and KLA Corporation.
“DRAM prices for the third quarter exceeded expectations due to reduced production capacity, and the trend of rising prices is expected to continue. Micron is our top pick stock, and now is the time to buy more.”
DRAM prices are expected to rise by about 15% above expectations in the 3rd quarter of '24. The DRAM market continues to improve, and DRAM prices in 2024 are expected to rise 62% compared to the previous year. This is due to limited growth in supply volume and memory manufacturers allocating production capacity to HBM.
● The most profitable supplier! The semiconductor industry's “top picks” selected by BofA are NVIDIA, Broadcom, and KLA
Bank of America is the semiconductor sector's”Top PicksAs” $NVIDIA (NVDA.US)$、 $Broadcom (AVGO.US)$、 $KLA Corp (KLAC.US)$are listed, and the reason for this is in each sub-sector”The most profitable supplier” That's why. Major chip manufacturers with a high proportion of data center operations, such as NVIDIA and Broadcom, are in a more advantageous position because it is expected that major cloud computing companies such as Microsoft and Amazon will continue to expand spending on infrastructure.
Also, BofA analysts are NVIDIA partners $Arm Holdings (ARM.US)$, Micron Technology, $ON Semiconductor (ON.US)$It was pointed out that it has the ability to respond to an increase in demand above expectations and rapidly expand sales,It is in a position to benefit in particularIt is stated. However, when demand was weaker than expected, based on past results, Broadcom, $Synopsys (SNPS.US)$、 $Cadence Design Systems (CDNS.US)$It was emphasized that semiconductor stocks such as these would attract attention.
● AMD and Piper Sandler selected as “Top Picks” and made a leap forward with AI
Piper Sandler is citing rapid market share expansion in the traditional server market $Advanced Micro Devices (AMD.US)$”Top PicksIt is positioned as”. Analyst Harsh Kumar gave AMD a “bullish” assessment and set a target share price of $175,The most bullish large semiconductor stocks in the second half of this yearThey are listed in.
Kumar is bullish on AMD's growth prospects in the PC and traditional server fields, but he pointed out that artificial intelligence is now at the center of the AMD story. According to Kumar's report, AMD already has more than 100 artificial intelligence processor customers, and most of them are expected to expand adoption in the latter half of 2024. Also, the MI300, which is AMD's main chip, is doing well, and sales are expected to exceed 4 billion dollars.
AMD has also announced the release of a series of new chips, such as the MI325 (scheduled for the second half of this year), MI350 (scheduled for next year), and MI400 (scheduled for 2026). Mr. KumarMi350 competes with Nvidia's Blackwell seriesThen,MI400 rivals NVIDIA's next-generation chip “Rubin”I suggested doing it.
● TSMC, a weather vane for the semiconductor world! Morgan Stanley named “Top Picks”
Morgan Stanley has received recent adjustments $Taiwan Semiconductor (TSM.US)$Thinking that the stock price of has become more attractive, Morgan S's”Top PicksIt was called”. Morgan Stanley analyst Charlie Chan and his colleagues stated, “We feel the strength in the quality and defensive nature of TSMC stocks during the long semiconductor downcycle.”
TSMC is a chip manufacturer selected by NVIDIA and AMD, and is also the sole processor supplier for Apple iPhones,An important weather vane for AI demandIt is regarded as one of them. TSMC announced financial results for the 2nd quarter of 2024 last month, and the core financial indicators are both year-on-year and quarter-on-quarterRecord double-digit growthThen,The full-year growth forecast has also been raised。
Sources: Bloomberg, The Motley Fool, Yahoo Finance, Seeking Alpha, Moomoo
This article uses automatic translation for some of its parts
ー MooMoo News Sherry
This article uses automatic translation for some of its parts
ー MooMoo News Sherry
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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