SMTC - Nvidia AMD stocks lead semiconductors higher as sector awaits Fed decision

2023-03-22 13:21:04 ET

Nvidia ( NASDAQ: NVDA ) and AMD ( NASDAQ: AMD ) shares led the semiconductor sector higher on Wednesday as investors awaited the latest interest rate decision from the Federal Reserve.

Nvidia ( NVDA ) gained more than 2.5% as a number of Wall Street analysts praised the company's announcements at its GTC developer conference.

Bank of America analyst Vivek Arya, who reiterated the firm's buy rating and raised the per-share price target to $310 from $275 on Nvidia ( NVDA ), said the keynote address, given by CEO Jensen Huang, "fundamentally" widened the company's competitive moat and expanded its opportunity to the "multi-trillion" IT and infrastructure as a service industry, from just being only focused on chips.

Barclays analyst Blayne Curtis, who has an overweight rating on Nvidia ( NVDA ), said the keynote showed the company is the "king" of generative AI.

"Clearly expectation were very high going into GTC, but this is the biggest secular tailwind in Tech and NVDA remains well ahead of the competition," Curtis wrote in an investor note.

AMD ( AMD ), which competes with Nvidia ( NVDA ), saw its shares rise more than 3% at mid-day.

Broadcom ( AVGO ) shares rose fractionally even as the U.K.'s competition regulator said the company's pending deal for VMware ( VMW ) could make servers more expensive.

"We are concerned this deal could allow Broadcom to cut out competitors from the supply of hardware components to the server market and lead to less innovation at a time when most firms want fast, responsive, and affordable IT systems," David Stewart, Executive Director at the CMA, said in a statement.

A Broadcom ( AVGO ) spokesperson told Seeking Alpha the company is "working constructively" with the CMA on the matter.

Micron Technology ( NASDAQ: MU ) shares rose fractionally even as Citi lowered estimates ahead of the company's fiscal second-quarter results next week.

"While we expect another lowering of estimates, our reasons to be positive on MU remain unchanged – we believe capex and utilization cuts by Micron and Hynix should create a bottom to the DRAM market over the next six months, and MU is trading close to a trough valuation," analyst Christopher Danely wrote in an investor note.

Semtech ( SMTC ) shares rose more than 6% following an upgrade from investment firm B. Riley, citing the potential for "acceleration" next year and the recent acquisition of Sierra Wireless.

Intel ( NASDAQ: INTC ) shares fell fractionally as the company reportedly expects to complete its purchase of Tower Semiconductor ( TSEM ) in the first-half of the year.

On Tuesday, Intel ( INTC ) unveiled several executive changes, including appointing Stuart Pann as senior vice president and general manager of the company's foundry business.

Other chip makers were mixed on Wednesday, including modest gains for Texas Instruments ( TXN ), Analog Devices ( ADI ) and Monolithic Power Systems ( MPWR ). Conversely, Qualcomm ( QCOM ), Skyworks Solutions ( SWKS ) and NXP Semiconductors ( NXPI ) saw fractional losses.

Santa Clara, California-based Nvidia ( NVDA ) reportedly increased its order for AI-linked chips via Taiwan Semiconductor ( TSM ) due to high demand .

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