- TSMC is about to usher in a promising new business.
- Nvidia is about to be oversold.
Investors in the semiconductor industry have had a rough year so far in 2022 after a boom in recent years.you just have to look VanEck Semiconductor ETF (NASDAQ: SMH) see how Punishment this year Always a chip investor. A leading chip stock fund with more than $6 billion in net assets, the ETF is down 35% over the past 10 months.
However, this is not always the case.In recent years, semiconductor companies have turned to actual capacity expansion Solve the global chip shortage. Amid these shortages, chip prices have soared, creating a premium for semiconductor companies. But investors have recently been disgusted by chip stocks amid concerns that expanding capacity could lead to a supply glut that could hurt prices. Hence the multi-month sell-off.
Recession fears have also spooked some investors in the semiconductor industry amid fears that chip demand may be weak. In addition, the U.S. government’s recent decision to restrict the sale of certain chips to China has only added to the uncertainty for investors in the semiconductor industry. As a result, chip stocks have fallen sharply from their recent highs across the board. But there is chaos and opportunity, and now may be the best time to buy oversold semiconductor stocks on dips.Let’s take a look at these two stocks worth considering rebound.
TSMC (NYSE: TSM)
There are many participants in the chip supply chain. TSM participates in the production side. As the name suggests, the company is headquartered in Taiwan, the global chip production capital, where they handle contract chip production and are a leading global supplier in this field.
In fact, Nvidia recently commissioned TSM to manufacture its latest generation of gaming graphics chips, which is a huge win for them, as Nvidia produced the previous generation of these chips in Samsung factories. Over the years, the company has invested in improving its manufacturing technology, make them an easy choice Manufacturer of advanced semiconductor components.
Notably, the passage of the Chips Act caused some unease among TSM investors. Many worry that the domestic semiconductor subsidy program in the United States could erode Taiwan’s competitiveness in the chip-making market and deal a blow to companies such as TSMC. But Taiwan went out of its way to reaffirm its place in the global semiconductor supply chain, arguing that the Chip Law would not threaten its chip industry.
If anything, TSM would actually benefit from the Chip Act. The company is building a $12 billion semiconductor factory in Arizona, allowing them to benefit from a program of subsidies and tax credits for the U.S. chip industry.
Amid all this, however, TSM stock recently hit a new 52-week low, but looking at the charts, a bullish setup has begun to emerge. there is a strong argument With the RSI reading now at 35, indicating that the stock is extremely oversold, a low could be on the way soon.
Nvidia is one of the most well-known semiconductor brands, and they design graphics chips for Various gaming equipment. The company also makes artificial intelligence chips for data centers and other applications. Nvidia has recently launched a new generation of advanced flagship GeForce graphics chips for the gaming industry, and in order to demonstrate its market prowess, they have kept their prices high on these chips.Risk of U.S. ban on sales of advanced semiconductor components to China could hurt sales, but most likely the company’s latest graphics chips will not be affected.
Still, its stock has been selling off since March. In addition to broader concerns about the industry outlook and recession fears, Nvidia’s mixed earnings report for the most recent quarter also left investors with a stomachache.
They hit a new 52-week low of $125 this week, but with the stock RSI near 20, you have to think they’re going to be very oversold soon. Indeed, they consolidated this level in 2020 and 2021, so there is a good chance that the bulls will step in again this time.
If you’re a longtime fan of the industry, you might want to start thinking about supporting trucks.
NVIDIA is part of the Entrepreneurs Index, which tracks some of the largest public companies founded and run by entrepreneurs.