Today's video focuses on the broad market sell-off impacting semiconductor companies. Advanced Micro Devices (AMD -1.62%) and Apple (AAPL 2.24%) are dramatically different companies but have a few things in common. First, both serve the consumer market, and second, both have analysts that believe there is an increased risk of consumer spending slowing down. Here are some highlights from the video.
- On March 31, a Barclays analyst downgraded AMD due to the potential risk of a slowdown in demand for its consumer products. On April 1, J.P. Morgan Securities removed Apple from its "Analyst Focus List" due to the risk of moderation in consumer spending.
- Numerous semiconductor companies that deal with consumer electronics like Micron Technology (MU -1.31%), Intel (INTC -1.65%), and Nvidia (NVDA 1.14%) were all down low single digits midday Friday.
- The semiconductor market tends to be cyclical, and investors might be worried that the market has peaked for this cycle. Unfortunately, this is very hard to determine due to the strong spending by enterprises and cloud providers. So as one market peaks, the other market could just be getting started. The great thing about long-term investing is that you can ride out the cyclicality without stressing about where we are in the cycle.
Click the video below for my full thoughts and analysis.
*Stock prices used were the market prices of April 1, 2022. The video was published on April 1, 2022.