The semiconductor sector has been the market’s favorite group in 2023. And why not?
I mean, AI, right?
Ask anyone, and I’m sure they’ll tell you NVIDIA (NVDA) is THE stock to own here… but I think you can do just as good at a lower price with one of my favorite chip stocks, Intel (INTC).
Intel shares have doubled this year, and things are just getting started.
This chip giant has taken some time to pivot in the AI market, which is the reason that they were left behind in the AI gold rush. But remember, Intel made their name in the foundry business, and that’s a business that is getting even more attractive for the company.
NVIDIA’s hot AI chips are manufactured by Taiwan Semiconductor (TSM). That leads to a little concern for the most overvalued company in the AI space as tensions around a reunification of China and Taiwan are clearly on the rise.
At the same time as these risks rise, Intel is benefitting from the U.S. government’s push to domesticate chip production with the CHIPS Act passed in 2022.
Just like anything with the government, the benefit of the CHIPS Act for Intel has been slow, but we’re going to see that change… especially if those geopolitical tensions in China don’t notch down.
Ask yourself… what the odds of that happening are?
Bottom Line: General Electric (GE) and IBM (IBM) are examples of how these larger-than-life companies can take a long time to turn around, but when they do, you grab them and hold on. Intel’s giving you that opportunity right now.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant – like the “rocket scientists” of investing – with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street’s data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It’s the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron’s, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.
