Nvidia, AMD surge as chip stocks continue run to start 2023
Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) were among the largest percentage gainers in the semiconductor industry on Monday as the broader chip sector continued to rise to start the new trading year.
Nvidia (NVDA) and AMD (AMD) gained more than 7% apiece even as investment firm Citi noting that November monthly sales for the industry fell 2.2% month-over-month to $43B below the 0.7% month-over-month rise that has happened in the past and below the firm's estimate of $45B.
"We maintain our 2022 forecast of up 4% [year-over-year] but lower our 2023 semi sales from down 7% [year-over-year] to down 10% [year-over-year] driven by the inventory build and recession," Citi analyst Christopher Danely wrote in a note to clients.
Danely said that Analog Devices (NASDAQ:ADI) is still the firm's top pick given its defensive nature. However, once the downturn in the industry ends, the firm favors AMD (AMD), GlobalFoundries (GFS), ON Semiconductor (NASDAQ:ON) and Micron (MU).
AMD (AMD) and Nvidia (NVDA) have gained 8% and 11.6% respectively to start the year, while the broader Philadelphia Semiconductor Index is up a similar amount.
Analog Devices (ADI) rose 2.1% in mid-day trading, while competitor Texas Instruments (TXN) rose 2.5%.
ON Semiconductor (ON) rose 5.6%, while Micron (MU) rose slightly less than 1%. GlobalFoundries (GFS) rose slightly more than 6%, while Taiwan Semiconductor (TSM) added nearly 4%.
Also seeing gains on Monday were Intel (INTC), Qualcomm (QCOM), NXP Semiconductors (NXPI) and Broadcom (AVGO), all of which each rose about 2%.
Chip equipment companies also rose broadly on Monday, including ASML Holding (ASML), Lam Research (LRCX), KLA Corp. (KLAC) and Applied Materials.
Last month, investment firm UBS picked AMD (AMD), Nvidia (NVDA) and Micron (MU) among its top semiconductor stocks for 2023, noting that momentum in the sector is likely to build in the back half of the year.