NVDA - Every Chip Stock Investor Should Hold a Position in Intel and We Were Just Reminded Why
2024-07-21 04:30:00 ET
The prospect of tighter U.S. restrictions on exports to China and recent comments from presidential candidate Donald Trump knocked some of the wind out of chip stocks. Semiconductor stocks slid as the Biden administration floated the prospect of tougher trade restrictions on the industry while Trump suggested that if elected, he would want Taiwan to pay the U.S. for its defense. Taiwan, home to leading foundry operator Taiwan Semiconductor Manufacturing (NYSE: TSM) , captures about 62% of the revenue generated globally by chip foundries, according to TrendForce. Concerns about the future led to a sell-off in TSMC as well as stocks like Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) , which depend on TSMC's fabs for production and also reported significant sales to China.
One of the few stocks that responded positively to this news from the presidential candidates was Intel (NASDAQ: INTC) , whose stock price spiked sharply higher in Wednesday trading before pulling back for a modest gain. And while that surge of enthusiasm waned quickly, it was a reminder of why serious semiconductor industry investors should have at least some Intel stock in their portfolios.
Admittedly, Intel's heyday is likely long behind it. It lags behind AMD on the chip design side of the business, and its new third-party fab operation, Intel Foundry Services (IFS), is behind TSMC and Samsung in terms of process technology.
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Every Chip Stock Investor Should Hold a Position in Intel, and We Were Just Reminded Why