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Semiconductor Shakeout: Finding Potential Amidst Turmoil

Closeup photo of a semiconductor microchip. Semiconductor Shakeout: Spotting Potential in Turmoil

Key Points

  • Last week, semiconductor stocks witnessed a significant decline, with NVIDIA alone losing nearly $200 billion in market value.
  • The recent selloff in the semiconductor sector highlighted its susceptibility to market shifts, leaving investors facing tough decisions.
  • Amidst a correction and upcoming earnings reports, the semiconductor industry faces a pivotal moment, prompting a closer look at these five stocks for potential opportunities.
  • 5 stocks we like better than NVIDIA

The semiconductor sector, usually a beacon of market strength, found itself in a storm last Friday. Shares of NVIDIA Corp. NASDAQ: NVDA closed the day down 10%, wiping out nearly $200 billion in market capitalization. This dramatic plunge sent shockwaves through the industry, leaving many leading names in deep correction, some even in bear market territory.

The recent selloff across the semiconductor sector saw hundreds of billions wiped out in market capitalization, underscoring the sector's vulnerability to sudden shifts in market sentiment. Amidst the uncertainty, investors face tough decisions: cut their losses, hold firm in anticipation of a rebound, or capitalize on the dip by strategically positioning themselves for potential future gains.

Now, in the thick of a correction and with earnings reports on the horizon, the semiconductor industry is at an important juncture. The sector has been the powerhouse driving the market’s growth for the previous year, thanks to the revolutionary advancements in artificial intelligence (AI). So, let’s look closely at five semiconductor stocks to see if opportunity lies within the recent turmoil.

NVIDIA Corp.

NVIDIA Today

NVIDIA Co. stock logo
NVDANVDA 90-day performance
NVIDIA
$117.93
-3.16 (-2.61%)
(As of 07/19/2024 ET)
52-Week Range
$39.23
$140.76
Dividend Yield
0.03%
P/E Ratio
68.97
Price Target
$129.76
NVIDIA has seen a modest recovery following last week's significant selloff. After closing around $750 last Friday, it is trading near $820. Down nearly 15% from its 52-week high, the stock currently sits below its 20-day and 50-day SMA. With this positioning, further downside potential may loom.

However, should NVIDIA reclaim these short- to mid-term simple moving averages (SMAs), a target of $900 could be considered. All eyes are now on NVIDIA's upcoming earnings report scheduled for May 22. This event serves as a catalyst for the semiconductor sector and holds implications for the broader market.

Arm Holdings 

ARM Today

Arm Holdings plc stock logo
ARMARM 90-day performance
ARM
163.40
+5.07 (+3.20%)
(As of 07/19/2024 08:55 PM ET)
52-Week Range
46.50
188.75
Arm NASDAQ: ARM, a prominent player in the semiconductor industry, has seen a steep decline of 40% from its 52-week high. Last week, the stock breached key support near $120, triggering a downward spiral. With earnings scheduled for May 8, the company anticipates earnings growth of 158% for the full year. However, investors eagerly await signs of stabilization and consolidation amidst the recent volatility.


Currently trading within a wide 52-week range of $46 to $164, Arm Holdings reflects significant turbulence. As investors brace for the upcoming earnings report, the stock's performance will be closely scrutinized for any indications of a turnaround.

Broadcom Inc.

Broadcom Today

Broadcom Inc. stock logo
AVGOAVGO 90-day performance
Broadcom
$157.35
-3.17 (-1.97%)
(As of 07/19/2024 ET)
52-Week Range
$79.51
$185.16
Dividend Yield
1.33%
P/E Ratio
6.77
Price Target
$240.08
Broadcom Inc. NASDAQ: AVGO, one of the largest semiconductor companies globally, boasts a market cap of nearly $600 billion. With a Moderate Buy rating based on 22 analyst ratings, it is a top-rated sector stock. Despite the recent volatility, AVGO demonstrates relative strength, down only 10% from its 52-week high.

Notably, the stock recently maintained key support near $1,200 and is now trading near converging moving averages around $1,300. Should AVGO continue to consolidate above these converging SMAs, a potential breakout to the upside may be in store.

Advanced Micro Devices Inc. 

Advanced Micro Devices Today

Advanced Micro Devices, Inc. stock logo
AMDAMD 90-day performance
Advanced Micro Devices
$151.58
-4.19 (-2.69%)
(As of 07/19/2024 ET)
52-Week Range
$93.11
$227.30
P/E Ratio
222.92
Price Target
$194.97
With shares down 32% from its 52-week high, Advanced Micro Devices NASDAQ: AMD is in a bear market. Despite the steady downtrend, the stock remains above a rising 200-day SMA. Stability above the 200-day SMA will be crucial for any potential upward trend reversal. Analysts maintain a bullish outlook, rating the stock a Moderate Buy with a price target of $185.59, suggesting a possible upside of 21.3%.

Taiwan Semiconductor Manufacturing Company

Taiwan Semiconductor Manufacturing Today

Taiwan Semiconductor Manufacturing Company Limited stock logo
TSMTSM 90-day performance
Taiwan Semiconductor Manufacturing
$165.77
-6.10 (-3.55%)
(As of 07/19/2024 ET)
52-Week Range
$84.01
$193.47
Dividend Yield
1.03%
P/E Ratio
31.58
Price Target
$200.00
Taiwan Semiconductor Manufacturing Company NYSE: TSM, the world's leading pure-play semiconductor foundry, has experienced a decline of nearly 14% from its 52-week high. Despite being in correction territory, like AVGO, the stock shows signs of consolidation near converging SMAs, with $140 posing as resistance.

Analysts maintain a bullish outlook on TSM, rating it a Moderate Buy with a consensus price target indicating over 15% upside potential. If TSM persists in consolidating and breaches the $140 resistance level, a move toward $150 could be the next target.

Should you invest $1,000 in NVIDIA right now?

Before you consider NVIDIA, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list.

While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Ryan Hasson
About The Author

Ryan Hasson

Contributing Author

Technical Analysis, Momentum Trading, Risk Management

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
NVIDIA (NVDA)
4.9215 of 5 stars
4.92 / 5 stars
$117.93-2.6%0.03%68.97Moderate Buy$129.76
Taiwan Semiconductor Manufacturing (TSM)
4.4269 of 5 stars
4.43 / 5 stars
$165.77-3.5%1.03%31.58Moderate Buy$200.00
Advanced Micro Devices (AMD)
4.8942 of 5 stars
4.89 / 5 stars
$151.58-2.7%N/A222.92Moderate Buy$194.97
Broadcom (AVGO)
4.9991 of 5 stars
5.00 / 5 stars
$157.35-2.0%1.33%6.77Moderate Buy$240.08
ARM (ARM)
0.6993 of 5 stars
0.70 / 5 stars
163.40+3.2%N/AN/AModerate BuyN/A
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