Will  the stocks of semiconductor producers rebound soon?

Will the stocks of semiconductor producers rebound soon?

2021-06-17 • Dikemaskini

The amount of problems caused by the coronavirus pandemic is huge. One of them is the global shortage of computer chips that started a year ago. At first, it looked like a temporary delay in supplies after factories faced first lockdowns. As the economies reopened, a boom in demand for new electronic devices, games consoles, and TVs was growing so fast it could not meet the supply. As a result, such big names as Apple, Sony, and Samsung had to raise prices for their products. Samsung even delayed the launch of its new Galaxy Note smartphone because of disruption in supplies.

The global chip shortage added pressure to the stocks of the semiconductor producers. However, after the storm comes sunny weather, according to the CFRA Research. The company sees this delay as a temporary one and expects good results from several companies operating in this sector. The main reason behind this possible stabilization lies in the development of artificial intelligence (AI).

The AI development and integration will create the strongest trend that ever existed in the semiconductor industry. CFRA Research forecasts the number of semiconductors per unit to show a 13% yearly increase in the next five years.  Given these facts, which companies should you start to track before it’s too late?

Trade stocks of AMD and NVIDIA in FBS Trader!

AMD

Potential growth – 23%

Price target: $100

The company wants to increase its share in the semiconductor sector. It looks like a reasonable investment due to an increased demand for graphic processors in the gaming and AI industries.  Another bullish factor for this stock is the recent buying of Xilinx that gives access to FPGA (field-programmable gate array).

Short-term technical picture

On the daily chart, the stock surged to $83.3 (200-day MA) on Thursday. The breakout of this level will increase possibility of reaching $86 and $87.80. If bears pull this stock below the $79.70 level, the slide towards $78 will be expected.  

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NVIDIA

Potential growth – 8%

Price target: $768

There are several reasons for the NVIDIA stock to go higher. First of all, this is the best investment idea, according to the Bank of America. Secondly, the company expanded its chain of data centers amid AI systems’ development and increased data volumes.

Short-term technical picture

NVIDIA was enjoying fresh highs on Thursday. The stock has almost reached $750. The next potential resistance is located at $760. If the stock goes down, it will face the support of $690.

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