I wrote the paragraph below earlier today in response to a Barron's article:
On my 'top chip list' for '23, I have a tie between AMD and QCOM...big fan of both! And I think there's some similarity to their stock's plights, though they traffic in different chip spaces. AMD is tagged as a "PC chip" company and gets dragged down by the post-Covid cliff-dive of PC sales. QCOM, same with cell phones...slower AAPL sales and QCOM gets whacked. Both companies have diversified meaningfully with the newer segments in strong growth modes, though admittedly not yet making up the majority of revenues and profits. But that's en route! AMD, most notably with the XLNX acquisition. And QCOM with the move to the auto and IofT spaces.
As for when to buy either (or both)? The answer lies beyond these two names and is more driven by the broader market. But both qualify for the saying: "if you liked them at their prices a few months ago, you'll love them now!"
As you can see on the chart, AMD has been pounded along with the whole tech cohort and broader market, currently resting on the 50dma. With all the negativity out there on the tech space, it's hard to rule out a revisit of the October lows, despite Morgan Stanley's 'top pick' call. Momentum indicators are screaming 'wait and see'.
Bottom line? It's going to be tough for anyone to call the bottom in chip stocks. But making sure the future winners are front and center on the radar screen is step one. Nibbling at key support points might be step two.
Step one I"ve done. Not yet ready on step two....but waiting and seeing....
As always, nothing written here explicitly or implied is meant to be advice in any way! Simply food for thought and discussion.
Comments welcome.
On my 'top chip list' for '23, I have a tie between AMD and QCOM...big fan of both! And I think there's some similarity to their stock's plights, though they traffic in different chip spaces. AMD is tagged as a "PC chip" company and gets dragged down by the post-Covid cliff-dive of PC sales. QCOM, same with cell phones...slower AAPL sales and QCOM gets whacked. Both companies have diversified meaningfully with the newer segments in strong growth modes, though admittedly not yet making up the majority of revenues and profits. But that's en route! AMD, most notably with the XLNX acquisition. And QCOM with the move to the auto and IofT spaces.
As for when to buy either (or both)? The answer lies beyond these two names and is more driven by the broader market. But both qualify for the saying: "if you liked them at their prices a few months ago, you'll love them now!"
As you can see on the chart, AMD has been pounded along with the whole tech cohort and broader market, currently resting on the 50dma. With all the negativity out there on the tech space, it's hard to rule out a revisit of the October lows, despite Morgan Stanley's 'top pick' call. Momentum indicators are screaming 'wait and see'.
Bottom line? It's going to be tough for anyone to call the bottom in chip stocks. But making sure the future winners are front and center on the radar screen is step one. Nibbling at key support points might be step two.
Step one I"ve done. Not yet ready on step two....but waiting and seeing....
As always, nothing written here explicitly or implied is meant to be advice in any way! Simply food for thought and discussion.
Comments welcome.