Semiconductor stocks surged after Nvidia set the group on fire. The group strength in the semiconductor industry was note worthy on Thursday, with many surging on above average volume.
Nvidia (NVDA) made headlines, after beating earnings expectations by a wide margin. According to analysts, Nvidia could become the first trillion-dollar semiconductor company due to its enterprise opportunity, strength in the AI segment, and more¹. Nvidia’s robust first-quarter results were led by strength in its data center revenue, which rose 14% year-over-year to a record $4.28B². The company’s shares are up significantly thanks to the AI frenzy³.
Semiconductor Stocks Surge – NVDA Beats
Semiconductor stocks are hot. Take a look at the iShares Semiconductor ETF (SOXX) chart. The SOXX broke higher, printing another higher high. Completion of the pattern would suggest a revisit of the December 2021 highs at 559.00, so fasten your seat belt.
Applied Materials (AMAT) and KLA Corp. (KLAC) moved back above buy points on Thursday, along with chip-design software maker Cadence Design Systems(CDNS).
Mobileye (MBLY) flashed early buy signals.
Nvidia (NVDA) has been a massive winner thanks to the AI trend, outshining other semiconductor stocks such as AMD⁴. The company’s earnings reinforce the view that Intel is ‘a major loser and share donor’ in the race for chips that support artificial intelligence⁵. In fact, Nvidia appears to have taken over from Taiwan Semiconductor (TSM) as the “World’s Most Valuable Semiconductor Company” (as measured by market capitalization)⁶.
Source: Conversation with Bing, 5/25/2023
STRATEGY TIP: We are waiting for Nvidia (NVDA) to base at its new all-time highs.
Frequently, we see stocks gap up as institutions fall all over themselves accumulating shares. In this instance, we are looking for 6-7 days of consolidation for a particular “*th day” strategy to trigger. Either the stock fades, moves sideways, or continues higher. The latter case is possible too, as we’ve seen in many cases, like the most recent META earnings.
This idea of buying at new highs brings up a quote that we have stood by for over 37 tears, when trading breakouts in quality companies.
“The great Paradox of the Stock Market is that what seems too high in price and risky to the majority usually goes higher, and what seems low and cheap usually goes lower.” – Willaim O’Neil @IBD
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Vinny
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(1) NVIDIA Analysts Praise Company Hitting The ‘Mother of All Cycles’: ‘To $1 Trillion And Beyond For The AI Leader’. https://www.msn.com/en-us/money/news/nvidia-analysts-praise-company-hitting-the-mother-of-all-cycles-to-dollar1-trillion-and-beyond-for-the-ai-leader/ar-AA1bGQA2.
(2) Inside Nvidia: AI drives record data center revenues, while gaming recovers. https://www.msn.com/en-us/money/topstocks/inside-nvidia-ai-drives-record-data-center-revenues-while-gaming-recovers/ar-AA1bGIwE.
(3) Nvidia – the Tesla of AI – adds $US300m to market value in 60 mins, becomes 6th largest global company just like we said it would biatches. https://stockhead.com.au/news/nvidia-the-tesla-of-ai-adds-us300m-to-market-value-in-60-mins-becomes-6th-largest-global-company-just-like-we-said-it-would-biatches/.
(4) Why Nvidia Outshines AMD and Other Semiconductor Stocks in AI. https://www.fool.com/investing/2023/05/25/why-nvidia-outshines-amd-and-other-semiconductor-s/.
(5) Why Intel’s stock is falling as Nvidia leads semiconductor sector on a …. https://www.marketwatch.com/story/why-intel-stock-is-falling-as-nvidia-leads-the-rest-of-the-semiconductor-sector-on-a-massive-surge-7109f77e.
(6) Nvidia: The World’s Most Valuable Semiconductor Company – Seeking Alpha. https://seekingalpha.com/article/4453075-nvidia-the-worlds-most-valuable-semiconductor-company.