5 Semiconductor Stocks to Buy After Nvidia Loses $500 Billion

5 Semiconductor Actions to Consider After Nvidia’s $500 Billion Market Capitalization Loss

After Nvidia’s sudden drop of $500 billion in market capitalization, doubts have arisen about the stability of the chip market and the sustainability of such high valuations given their intrinsic volatility.

The AI boom propelled Nvidia to record levels, with a market capitalization exceeding $340 billion, surpassing even Apple and Microsoft.
This milestone was achieved thanks to Nvidia’s dominant position in the AI GPU market, highly sought after by tech giants such as Microsoft, Google, Amazon, Oracle, and Meta, who invest billions in Nvidia chips to power their data centers and cloud services.

Despite the recent turbulence, Nvidia’s long-term prospects remain solid.
The company continues to see strong demand for its AI GPUs, essential for the operations of major tech companies.
However, AI is not exclusive to US tech giants.
There are also interesting opportunities in companies from emerging markets like Korea and Taiwan, operating in the AI supply chain.

These often underestimated companies offer exposure to the semiconductor sector with more accessible valuations.

Let’s discover together which are the most promising stocks.

1) Taiwan Semiconductor Manufacturing Company (TSMC)

Taiwan Semiconductor Manufacturing Company (NYSE: TSM) is one of the main beneficiaries of AI innovations.
TSMC is a strategic partner for Apple.
The demand growth for AI products has driven TSMC’s sales to increase by 30% annually, reaching $7.1 billion in May alone.
Analysts predict a 23.7% increase in TSMC’s total revenue by 2024, driven by strong demand for AI chips.
TSMC’s position as a reliable semiconductor supplier for Apple and other major tech companies, combined with its ability to support multi-year growth, makes this company a solid choice for investors.

Goldman Sachs analysts have raised TSMC’s target price from $183 to $218, implying a 26% potential upside from current prices, while maintaining a “buy” rating.
More cautious are Bernstein experts, who indicate a fair value at $200.

2) Micron Technology (MU)

Micron Technology (NASDAQ: MU) is one of the world’s largest memory chip manufacturers, essential for AI and machine learning.
In the most recent quarter, Micron’s revenues increased by 34.3% annually, reaching $6.1 billion.
Analysts expect the demand for high-bandwidth memory products to continue growing, fueled by the AI boom.
Industry experts have recently raised their price targets for Micron, with significant growth forecasts for the coming years.
The combination of strong market demand and a leadership position in memory chip production makes Micron a very interesting investment option.

Wells Fargo has recently increased Micron Technology’s price target by 40.7% from $135 to $190.

3) Advanced Micro Devices (AMD)

Advanced Micro Devices (NASDAQ: AMD) is another semiconductor stock to keep an eye on.
Despite recent difficulties, analysts believe that AMD can capture a significant share of the GPU market for data centers, estimated at around 10%.
This represents a potential market of $15 billion.
With a strong buy rating and an average price target of $191.03, AMD is well positioned to benefit from the growing demand for data center infrastructure and ongoing innovation in its GPU and CPU products.
AMD’s ability to compete with Nvidia in the data center GPU sector represents a significant opportunity for investors.

According to CFRA experts, AMD’s target price is $200, while Wolfe Research places it at $210.

4) SK Hynix

SK Hynix (KRX: 000660), based in South Korea, is a leader in the high-bandwidth memory (HBM) chip market, essential for AI applications.
HBM demand is expected to grow by 60% annually in the medium to long term.
SK Hynix recently announced an investment of nearly $4 billion to build an advanced facility in the United States, demonstrating its commitment to maintaining a leadership position in the market.
With significant growth forecasts and a relatively low earnings multiple, SK Hynix represents a solid and promising investment choice in the semiconductor sector.

DB Financial experts have set the stock’s target price at 300,000 won.

5) King Yuan Electronics

King Yuan Electronics (TWSE: 2449), based in Taiwan, provides testing and measurement services for the semiconductor supply chain and collaborates with companies like Nvidia.
The company has seen a 38% increase in its shares since the beginning of the year and a 100% growth in the last 12 months.
Despite this significant growth, King Yuan Electronics’ price-to-earnings ratio remains competitive compared to the Taiwanese market.

With earnings growth forecasts of 11% annually over the next three years, King Yuan Electronics represents an interesting opportunity for investors looking to capitalize on the semiconductor market’s growth dynamics.