On July 13, chip stocks dropped sharply for several reasons, including escalating geopolitical tensions.
It’s not that surprising to see many investors take some profits as they fear what may happen to broader equities if conflicts in the Middle East worsen
However, for those focused on the long term, it’s still worth buying shares of top semiconductor stocks and riding out this volatile period. Here are two great picks to consider: Nvidia (NASDAQ: NVDA) and Marvell Technology (NASDAQ: MRVL). 1. Nvidia Shares of Nvidia are surprisingly cheap right now relative to its growth potential.
The company is trading at 24.1x forward earnings, versus an average of 21.7x for information technology stocks. Considering Nvidia is the undisputed leader in the GPU (Graphics Processing Unit) market, boasts a wide moat due to high switching costs, and still has a vast opportunity as artificial intelligence (AI) infrastructure spending grows, the stock looks like a bargain at current levels. While the bears fear that the competition will eventually catch up to Nvidia, so far, hardly any one of them has been able to make much headway in disrupting its empire.