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 (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.