The semiconductor industry has become an intense area of focus in the stock market over the past few years. Itās always been important, but the advent of artificial intelligence is driving unprecedented interest. Since the beginning of 2023, companies like NVIDIA (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) have emerged as massive winners in the space. The stocks are up over 800% and over 300%, respectively, over that time, as of the Feb. 10 close. They are far from the only winners, but the two stocks stand out. Their ability to continue rising somewhat steadily is an indication of their persistent strength to this point.
The three stocks detailed on this list have had their days in the sun but havenāt exhibited anywhere near the consistency of NVIDIA and Broadcom. Below, Iāll examine three giant names in the semiconductor industry that are still trading 50% or more below their 52-week highs. Iāll provide context around each of their individual journeys and give insight into how they can hope to reclaim their prior glory.
AMD: NVIDIAās Successful, But Still Disappointing, Little Brother
In the world of semiconductor stocks, some tides lift all boats, while others create winner-take-all situations. Both of these ideas somewhat characterize the recent journey of Advanced Micro Devices (NASDAQ: AMD). The stock has an impressive return of 70% since Jan. 1, 2023. However, it is still trading 51% below its 52-week high, reached on Mar. 8, 2024. The company is working to compete against NVIDIA. It wants to build graphics processing units (GPUs) and associated systems for data centers that can rake in cash as fast as its fierce rival.
Ultimately, markets have largely judged the stock by its ability to show any progress in taking market share from NVIDIA in this space. AMDās data center revenue is growing fast, increasing by 69% in Q4 2024 versus Q4 2023. However, itās not on pace with NVIDIA. In Q3, NVIDIAās data center revenue increased by 112%. NVIDIAās lead keeps growing. Note that these numbers arenāt fully comparable since NVIDIA hasnāt yet released the Q4 results. Ultimately, the market wants to see AMD achieve stronger growth for its AI Instinct GPUs and continue increasing profit margins, which are still massively below NVIDIAās.
Intel: Needs Innovative New CEO to Come to the Rescue
Once the most important player in the U.S. semiconductor industry, Intel (NASDAQ: INTC) has been a huge disappointment recently. Since the beginning of 2023, shares have provided a total return of -22%. Its shares are currently down nearly 58% from their 52-week high. The company is an integrated device manufacturer. This means that it not only designs but also manufactures its chips. The company missed the boat on designing GPUs that would largely power the rise of AI in data centers. The companyās AI data center GPU chip, Gaudi, hasnāt come close to meeting expectations. Overall, the firmās data center revenue dropped slightly year-over-year in Q4, while margins plummeted.
The best hope for the company going forward might be winning in the AI-enabled PC market. The companyās Client Computing Group segment is by far its largest revenue and profit driver. A refresh cycle in PCs that many are hoping for would be a boon to Intel. Most people agree that the company needs a new CEO, as it requires a new vision for how it will grow.
Supermicro: All Eyes on Feb. 11 Update
Super Micro Computer (NASDAQ: SMCI) has by far seen the most wild swings of all three of these firms. Shares are up over 400% since Jan. 2023. However, they are still down 65% from the incredible highs they reached back in Q1 2024. But, they are up 40% year to date in 2025. The rally started on Feb. 3, kicked off by the company announcing it would provide a business update on Feb. 11. The firmās shares have gotten crushed as they delayed filings and its accounting auditor resigned. The company also announced that it is ramping up full production of its rack-scale solutions for NVIDIAās Blackwell chips.
Ultimately, the company needs to address concerns about its accounting practices in the update. It also needs to convince investors that it is close to completing its filing of its Form 10-K and that it will do so by Feb. 25. The companyās revenue growth of over 143% in Q2 2024 is incredibly impressive. Even if it is accurate, the company needs to be forthcoming and fix its internal problems to be investable going forward.
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The steel industry is back in the news again, courtesy of President Trump. The president is leaving his mark on the negotiations between Japanese company Nippon Steel (OTCMKTS: NPSCY) and United States Steel (NYSE: X). So, what does Trumpās stance mean for U.S. Steel stock going forward, and is there ultimately still upside in this historic basic materials company? Below, Iāll provide a brief history of the recent U.S. Steel and Nippon saga and address this question.
History Lesson: Nippon Looks to Buy Iconic U.S. Steel Maker
In Dec. 2023, Japanās largest steel maker, Nippon Steel, announced its plan to purchase U.S. Steel for $14 billion. On a per-share basis, the company agreed to pay $55. On April 12th, shareholders of U.S. Steel approved the purchase, with 98% of votes in support. It makes perfect sense why they did so. On that date, U.S. Steelās shares were trading at just $39.50. Completion of the deal would have given shareholders a 39% return from that current price.
However, in early January 2025, President Joe Biden, through the Committee on Foreign Investment in the United States (CFIUS), blocked the deal, citing national security concerns as the justification. This was an unusual decision. It is the only time that CFIUS has prevented a transaction without Chinese ownership or influence ties. U.S. Steel and Nippon have filed multiple lawsuits against this decision. If they win these lawsuits, the deal could go through.
Cut to early Feb., when newly inaugurated President Donald Trump exerts his influence over the steel deal. During a press conference with the Japanese Prime Minister, Trump stated that Nippon would not buy U.S. Steel. Instead, he said it would āinvest heavilyā in the company. At this point, markets know little about the specifics of the deal. However, there is some information on what Trump and the Japanese government are pushing for.
New Steel Deal: More Questions Than Answers
First off, Trump said that no one can have majority ownership when referring to U.S. Steel. This is important, as without a majority stake, Nippon cannot unilaterally force the company to take any specific action. Japanās Chief Cabinet Secretary stated that Nippon is looking at a new deal proposal. This one is ācompletely different from anything it has done in the past.ā Still, Nippon Steel officials have not yet released new comments. Last Thursday, just a day before these new developments, the companyās vice chairman said it had no plans to change the acquisition structure.
What It Means for Shares of Once Industry Titan, U.S. Steel
At this point, there appear to be two different ways things could go. First, Nippon and U.S. Steel could reject the ambitions of their respective governments to rework the deal. At the end of the day, the words from Trump and the Japanese government are just that: words. The two firms have the right to continue their lawsuit against the government and pursue the full, original deal.
I tend to agree with the assessment of the lawsuit that the acquisition of U.S. Steel does not represent a national security risk. Japan is ultimately a United States ally and is the worldās third-largest steel producer. China, which produces by far the most steel in the world, is a known U.S. rival. The acquisition would strengthen U.S. Steel and Nippon, making friendly companies more competitive with Chinese ones. Still, many legal scholars appear to agree that the chances of Nippon and U.S. Steel winning these lawsuits are low. Ultimately, this means that U.S. Steel shareholders likely wonāt receive that locked-in $55 per share price.
The much more likely option seems to be that U.S. Steel and Nippon will negotiate with the U.S. and Japanese governments. Without knowing the details of the new potential deal, it feels hard to say that U.S. Steel is significantly undervalued. It is trading at a forward price-to-earnings (P/E) multiple of nearly 20x. Thatās in line with competitors like Nucor (NYSE: NUE).
Shares are benefiting from the new 25% tariffs on steel and aluminum, but itās hard to see them really breaking out until the parties resolve this deal. Right now, itās prudent to wait for more information surrounding this deal and what actions U.S. Steel and Nippon will take. A recent $39 price target released by Morgan Stanley sees shares as fairly valued compared to their Feb. 10 closing price.
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As we step into 2025, artificial intelligence (AI) continues to revolutionize industries with groundbreaking advancements. From the surge in generative AI technologies transforming creative processes to AI-driven automation enhancing operational efficiencies, the landscape is brimming with innovation. These rapid developments are creating lucrative opportunities for investors who recognize the potential of emerging AI companies.
If price action is any indication of where the market is going, then the recent performance in theĀ financial sector can be an excellent gauge for investors to figure out where the best opportunities might be. By comparing different industry performances, investors can also gain a deeper understanding of where the economy is headed.
It is well known that when banking stocks start to outperform, the United States economy is seen as safe and in good hands moving forward, and no matter what the bearish traders out there might say, that is the case today. However, it wonāt actually be that simple this time around because not all stocks will behave the same in this rotation.
Over the past month alone, Citigroup stock has outperformed the broader S&P 500 by as much as 10%, signaling that this commercial bank has all the right tailwinds behind it to keep pushing for more. What this means for investors can be broken down into two major themes.
First, the market is perceived as optimistic about commercial banking activity, which is more dependent on consumers. Second, some stocks and financial products in the market, such as mortgages and credit cards, can definitely benefit from this trend.
This is probably why over $1 billion worth of institutional buying made its way into Capital One Financial Co. (NYSE: COF) over the past quarter alone, signaling interest in this credit card company for a better consumer environment. Or why analysts at Truist Financial also decided to boost the companyās price target in late January 2025.
Where they previously saw Capital One Financial valued at $229 per share, a new buy rating came along a much higher $257 valuation, calling for a net rally of up to 29.3% from where the stock trades today. Bullishness in this cyclical stock exposed to consumer financial trends can also be tied to the bullishness and performance behind Citigroup stock.
More than that, investors can spot the $49 million worth of Rocket Companiesā stock bought in the past quarter to signal more institutional interest in this space. Connecting the price performance in a commercial bank like Citigroup is paramount to finding the best opportunities within other cyclical industries, and the market agrees here.
Rocket Companies stock trades at a price-to-book (P/B) ratio of 3.1x today, commanding a steep premium over the mortgage industryās average 1.8x valuation. While some value investors might call this expensive, seasoned professionals will remind them that the market is always willing to pay premiums for the stocks it expects will outperform.
Investment Banking Implications
Moving to the price action in Goldman Sachs and J.P. Morgan Chase, investors can come to different conclusions, which have to do more with the business sector itself. Outperformance in these investment banks could mean that the market expects stronger business activity ahead for this year, and there are a couple of reasons why.
Now that more capital has flown into the iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT), yields are coming down a bit from where they previously were, creating a more flexible and friendly environment for businesses to finance their operations and expansion plans.
This might be why some institutional buyers started buying into the iShares Russell 2000 ETF (NYSEARCA: IWM)recently, as investors can see the $6.5 billion inflows over the past quarter, a bullish signal that cannot be ignored in this current development and banking price action.
With this in mind, investors now have a reasonable framework to navigate the current volatility spikes in the stock market caused by President Trumpās recent trade tariff announcements and ensure that their portfolios survive relatively unscathed.
Before you make your next trade, youāll want to hear this.
MarketBeat keeps track of Wall Streetās top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches onā¦ and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy nowā¦
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