The sector of Semiconductors are one of those silent giants that hold up the technological fabric of the modern world.. Without their advances, there would be no artificial intelligence, smart cars, or ultra-fast communications. However, after months of almost vertical rises and valuations that border on the excessive, the time seems to have come for a break to digest so much euphoria.
A look at the largest and best-known ETF in the sector, the VanEck Semiconductor ETF (SMH)reflects this situation: from the October 2022 lows, it has climbed an impressive 240%, going from $83.80 to $283. This ETF offers exposure to major players in the sector, such as NVIDIA, Broadcom and ASML, and manages more than $15 billion in assets. But today I am not interested in the big names that already dominate the market, but rather the blue sapphires that could enter the next review of the Tressis Cartera ECO 30 fund, advised by theEconomist.
These sapphires They represent exceptional stocks that, although they may be left out of the fund’s final selection, stand out for their solid fundamentals and excellent recommendations. At the heart of this industry, four jewels emerge that stand out for their ability to innovate, lead and resist: Micron Technology, driving the memory of tomorrow; BE Semiconductor, the European chip assembly specialist; NVIDIA, the graphics titan that has been able to capitalize on the artificial intelligence revolution; and Broadcom, the silent architect of global connectivity. These are not passing bets, but solid pillars with a promising future, even in times of market correction..
But even the hardest sapphires need to be polished and rested. The sector could be entering a phase where patience and selectivity will be key to prevent brilliance from becoming a mirage. In this sense, the ETF SMH is currently in a balance position, caught between resistance from the July 2024 highs at $283 and support from the April and August lows at $200.. Right now, it is located at an equal distance from a possible optimal long-term purchase area and the objective to be valued in the coming months, this is what I call no man’s land.
In this scenario, the opportunities are there, but the true success will lie in choosing accurately and remaining calm while deciding the next movement of the sector, which has every chance of being on the rise as long as it does not lose the minimums of this 2024.
BE Semiconductor
European specialist in semiconductor assembly and packaging systems, it plays a crucial role in improving chip efficiency and miniaturization. The growing demand for compact and powerful devices, such as mobile phones and AI equipment, positions this company as an essential cog in the industry’s value chain.
From a technical point of view, BE Semiconductor develops an impeccable long-term upward trend that would only get into trouble if a fall pierces the bullish guideline that has been guiding the increases almost to the millimeter since 2011, for which it should start the support represented by the August lows in the $90 area. If in the coming weeks we were to witness a cut towards 100-110 dollars they can buy. They can also do so if they assume the stop in the 90 dollarswhich is 30%. I prefer to wait to see if the distance to it decreases.
NVIDIA Corporation
Known for its graphics processing units (GPUs), NVIDIA has been one of the biggest beneficiaries of the generative artificial intelligence revolution and the rise of data centers. Its dominance in high-performance hardware and its expansion into software platforms for AI keep it at the technological forefront, although its valuations reflect very high expectations.
That is why I recommend you wait patiently for the title to develop a consolidation or drop similar to the one we saw between June and August of the 140 to 90 dollarswhich is what I took advantage of to recommend buying, just as I did with my twin children, something that Ecotrader subscribers are aware of since they received an alert with that recommendation. If there were that same drop, that would mean witnessing a drop to $100, where it would be a true gift to buy NVIDIA. In any case, with a drop to $120 I would be in favor of buying if they are out or want to increase positions.
Broadcom
Global leader in semiconductors for telecommunications, network infrastructure and wireless solutions. Its strategic diversification, which includes the development of software and the expansion in sectors such as 5G and digital infrastructure, gives it stability and sustained growth in an increasingly connected technological environment.
They can buy Broadcom shares looking for it to overcome its resistance of $185.50 in the coming sessions, which is what stopped the increases in June and October. On both occasions the fall was to seek support for the bullish guideline that guides the increases from the lows of 2022. With stops at 157 dollars They can buy to ride this uptrend. If you lose 157 I’m afraid it would fall to 130 dollarswhere it would be a gift and I would recommend buying for my twins.
Micron Technology
Leader in the manufacturing of DRAM and NAND memory solutions, essential for artificial intelligence applications, servers and mobile devices. Its cyclical nature, marked by ups and downs in global demand and memory prices, does not diminish its potential for the future, where the need for data storage will grow exponentially.
Micron is a stock that you absolutely have to have in your portfolio and if they are out they could take advantage of any approach to the 85 dollars to buy. There are the lows of last August and the current tangency with the bullish trend that has been guiding the increases since 2008, which is said to be early. In the current price zone, it doesn’t seem bad to me to put a stop at those $85, especially if they have little or no exposure to the sector.
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