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2 Semiconductor Stocks to Watch During This Decline

By Jose Najarro – Dec 20, 2021 at 11:30AM

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Can Nvidia's stock price keep dropping?

Today's video focuses on bullish and bearish points for Nvidia (NVDA 0.32%) and Advanced Micro Devices (AMD -0.74%). The stock prices of both companies have taken a hit in the past month. Could this drop be a buying opportunity for semiconductor investors? Here are some highlights from the video.

  1. AMD's third-generation server processor continues to win adoption by giant cloud providers. In November, IBM's (IBM 0.75%) Cloud selected third-generation AMD server processors for a new bare-metal offering. In December, Amazon's (AMZN 0.90%) AWS expanded its AMD EPYC processor-based offerings. 
  2. In Nvidia's most recent quarter, the company reported 50% revenue growth year over year (YOY). The demand for its graphics cards remains high while channel inventories remain low. Nvidia expects yearly and sequential growth in its gaming and data center products for its upcoming quarter. 
  3. On the bearish side, AMD and Nvidia are in intense competition against each other and have other competitors like Intel (INTC 1.40%). The demand for chips is still high, but if the market slows down because companies over-order, it could trigger a sell-off in the semiconductor industry. These bearish points are not new for AMD or Nvidia, but they're important to keep in mind. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the closed market prices of Dec. 17, 2021. The video was published on Dec. 19, 2021.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jose Najarro owns Advanced Micro Devices and Nvidia. The Motley Fool owns and recommends Advanced Micro Devices, Amazon, Intel, and Nvidia. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $57.50 calls on Intel, short January 2022 $1,940 calls on Amazon, and short January 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policyJose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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