Finance
Why Nvidia, AMD and other chip stocks are rising on Thursday
I-HWA CHENG / Contributor / Getty Images
The Nvidia GB200 NVL72 shown at Computex 2024 in Taipei on June 4, 2024.
Key learning points
-
Chip stocks rose Thursday, recovering from losses earlier this week on economic worries and reports of delays in the launch of Nvidia’s new Blackwell chip.
-
Thursday’s increase came amid signs that economic concerns may have been exaggerated, following a better-than-expected weekly jobless benefits report.
-
Analysts expected Nvidia and other chip stocks to benefit from long-term trends in artificial intelligence demand and suggested the recent volatility could provide investors with an opportunity to buy the dip.
Nvidia (NVDA), Advanced Micro Devices (AMD), Broadcom (AVGO), and other semiconductor stocks rose Thursday, recovering from losses earlier this week fueled by concerns about the U.S. economy and reports of delays at the launch of Nvidia’s new Blackwell chip.
The iShares Semiconductor ETF (SOXX) rose more than 6% on Thursday afternoon, after falling almost 3% on Wednesday. Chip stocks have been on a tear in recent weeks, especially since a weaker than expected July jobs report last Friday sent the markets into a tailspin.
Expectations of interest rate cuts by the Federal Reserve somewhat relaxedwith markets now pricing in a 55% chance that the central bank will cut rates by half a point in September, according to CME Group’s FedWatch tool, based on Fed Funds futures data. That’s down from 99% earlier this week There was speculation that the Fed could be prompted to make emergency cuts.
The short-term volatility offers opportunities to buy the dip, analysts say
With chip supplies is expected to benefit from the growing demand for artificial intelligence (AI). In the longer term, analysts suggested that recent volatility could present an opportunity for investors opportunity to buy the dip in Nvidia and other chip stocks.
Analysts from Piper Sandler, Oppenheimer, Bank of America and Goldman Sachs are weighing in on reports that Nvidia’s new Blackwell AI chip could be delayed. indicated that they expected little impact to the chipmaker’s long-term prospects, highlighting Nvidia’s AI strengths.
Nvidia told Investopedia on Tuesday that it expects Blackwell production to still be “on schedule” in the second half of the year.
Shares of Nvidia, Broadcom and AMD all rose more than 5% in recent trading.
Read the original article Investopedia.
