Zacks Analyst Blog Highlights NVIDIA, Micron, Taiwan Semiconductor Company, Advanced Micro Devices and Texas Instruments

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Chicago, IL – August 11, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: NVIDIA NVDA, Micron MU, Taiwan Semiconductor Company TSM, Advanced Micro Devices AMD, and Texas Instruments TXN.

Here are highlights from Thursday’s analyst blog:

Semiconductor stocks plunge: buy, sell or hold?

This week has been really bad for semiconductor stocks, as the first NVIDIA so what Micron announced that they were cutting their outlook.

NVIDIA attributed its failure to project (and it was a huge 17.3% failure) to weakness in the gaming sector, which it said was due to declining sales at gaming partners. distribution affected by macroeconomic concerns. Worse still, CEO Jenseng Huang warned, “As we expect macroeconomic conditions affecting the sale to continue, we have taken action with our gaming partners to adjust pricing and channel inventory.”

This then boils down to a slowdown in demand for discretionary items, as well as devices (PCs, smartphones, gaming devices, etc.). It could be the first, because some of that spending has been diverted to services and the “open” economy, especially because people have been buying a lot in the last 1-2 years and not having need more devices at the moment. And two, because there really is a problem called inflation that, despite all the stimulus money, is starting to hurt some customers.

This slowdown in demand could be a signal that the economy is going where the Fed predicted. Only, when it comes to these fabless semiconductor companies, they are seeing increased costs due to supply chain issues and the Taiwan-China-US tension is not helping matters at all.

On the contrary, there is a lot of concern about the future of chip supply given Taiwan’s leading position there. Taiwan Semiconductor Company sees more demand than it can meet and, as a manufacturer, is able to continue to raise prices. Its customers, like NVIDIA, are in a hurry (given the lack of more than 20 bps on the gross margin).

It’s not too much of a stretch to think that crypto softness affects NVIDIA as well, because it’sAdvanced micro-systems. And like AMD, Nvidia says supply chain issues are causing the data center to grow weaker than expected, but it still continues to grow very strongly.

Micron followed NVIDIA shortly after with its own announcement that macroeconomic conditions had deteriorated significantly, causing demand for its DRAM and NAND memory chips to slow since its June 30 call. the next two quarters. Capex is also reduced accordingly.

Predictably, the entire segment has been in the red since then, with chipmakers like AMD, NVDA, QCOM, MU, TSM, AMAT, INTC all selling out.

Recommendations

As is likely apparent from the discussion above, the semiconductor segment is not a good place to invest your money right now. In the case of companies like NVIDIA, Qualcomm, Micron, and AMD, you’ll likely find a better entry point because things seem to head down before going up. Intel is in a long-term stalemate and not recommended anytime in the near future. Therefore, selling Micron, AMD, and NVDA instead seems like a good plan.

There are a few actions that stand out though.

TSM is the one that benefits from being a low-cost manufacturer and despite all the fabless players desperate to diversify their supply chains, these things take time. So in the meantime, TSM is the only hope for many, especially given his prowess at the point.

Another stock that is generally a good defensive play isTexas Instruments. The fact that it has its own factories and relatively low exposure to Asian manufacturing is an added advantage.

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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.

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Texas Instruments Incorporated (TXN): Free Stock Analysis Report

Advanced Micro Devices, Inc. (AMD): Free Inventory Analysis Report

Micron Technology, Inc. (MU): Free Stock Analysis Report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

Taiwan Semiconductor Manufacturing Company Ltd. (TSM): free inventory analysis report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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