Semiconductor stocks have been beaten this year, but that hasn’t stopped money manager Rob Luna from investing his clients’ money — and his own — in a chip stock. His top pick in the semiconductor space is Nvidia, a company he describes as “best-in-breed.” He acknowledged that the stock is “absolutely out of favor now,” but said investors with a longer-term perspective could take advantage of the current low valuation to buy into the stock. “I don’t necessarily think you should go all in right now, but I think if you don’t have a position in a name like Nvidia, this is a good entry point,” Luna, the CEO and chief investment strategist at Surevest Wealth Management , told CNBC’s Street Signs Asia on Wednesday. “I’m very fond of Nvidia and again with the stock down 50% over the past year on a longer term theme we put our customers’ money there, that’s where I put my own money,” Luna added. Nvidia shares tumbled earlier this week after the chipmaker released preliminary results that showed second-quarter revenue came in well below initial forecasts. Shares of the California-based company closed at around $181 on Wednesday, a far cry from its 52-week high of around $346.50. The company has lost about half of its market cap over the same period. “Money is made by buying pessimism and selling optimism,” Luna added. Everything has a chip in it Luna sees the current slowdown in demand for chips as inevitable, especially as Covid restrictions ease. Demand for semiconductors surged during the pandemic as consumers bought more smartphones and computers to make it easier to work and study from home. Businesses also invested more in data centers to support remote working. But there are now signs that demand is easing as consumers return to schools and offices. On Tuesday, chip giant Micron became the latest company to warn of a slowdown in demand, joining a chorus of warnings from other major chipmakers including Intel, Qualcomm and Nvidia. Read more Top investor Paul Meeks says chipmakers are “gold” — and reveals his “must-owner” stock How strong is the US consumer? Here’s what Wall Street has to say — and the stocks it likes “boring is best”: Citi says it’s a bear market rally and stocks how to beat volatility Micron said demand for its DRAM and NAND chips have deteriorated since the company last provided an update on June 30. It also revised downward its revenue guidance for the current quarter and warned of negative free cash flow in the next quarter. But Luna says companies like Nvidia and Advanced Micro Devices have adapted well to the “declining” demand for computers, while Intel hasn’t. Playing with longer-term demand Luna remains bullish on longer-term demand, even though there is a slowdown now. “Of course you would see some kind of slowdown now, but if you look at the IoT and pretty much everything in our lives has a chip in it at some point… I think in your portfolio, you should have a slightly longer-term structural position,” he said he.” The position that [chips] “Keeping it in society is so important and so fundamental that I think it can be a good entry point for investors if you could think a bit longer term,” he added. He believes Nvidia “got it right”. will be a “long-term beneficiary” of its entry into gaming and automotive.
https://www.cnbc.com/2022/08/12/semiconductors-asset-manager-buys-this-best-in-breed-chip-stock.html The money manager buys this best-in-breed chip stock