What happened
All week long, trading in Nvidia (NVDA +1.02%) stock has been strong. After opening lower following the long holiday weekend, shares of the semiconductors-for-gaming leader have notched three straight days of stock price gains -- including this morning, with Nvidia stock up 2.2% through 10:30 a.m. ET.
You can probably thank sustained buying by Cathie Wood for that. But at the same time that Nvidia shares are bouncing back, so too are shares of rival semiconductor giant Intel (INTC +2.14%) and semiconductor manufacturing equipment maker Applied Materials (AMAT +2.23%). Intel stock is up 1.8% right now, and Applied Materials is gaining 2.6%.
NASDAQ: NVDA
Key Data Points
So what
As revealed on the ARK website late last night, the growth investing icon spent probably $3.6 million or so scooping up some 25,400 shares of Nvidia yesterday. And granted, those shares represent relative drops in the buckets of the $1.2 billion ARK Autonomous Technology & Robotics ETF (ARKQ +0.01%) and the $1.5 billion ARK Next Generation Internet ETF (ARKW 0.59%) funds that made the investments. But across the several ARK funds that have been snapping up Nvidia shares since late last week, it appears that Wood has been doing a lot more shopping than that, spending in excess of $50 million to acquire more than 375,000 shares of Nvidia.
And that's a lot more significant.
It's not just Wood buying, either. This morning, The Fly reported that investment bank Evercore ISI has put out a note calling Nvidia shares "extremely attractive" at $135 per share. And perhaps not coincidentally, $135 was right around the price at which Wood began buying last week!
Granted, there are still worries about Nvidia's China business, given new requirements to obtain export licenses to sell certain data center chips to China. But Evercore thinks there's a good chance Nvidia can obtain the necessary licenses, and even if it can't, that "alternative product offerings" could offset any data center business lost in China.
Now what
Well and good. That explains why Nvidia stock has been marching higher this week -- but what about Intel and Applied Materials?
NASDAQ: INTC
Key Data Points
Well, Intel has some good news of its own today, announcing this morning that it has just "broken ground" on two new semiconductor manufacturing plants in Ohio, the first step toward investing $20 billion in new production in the state.
NASDAQ: AMAT
Key Data Points
As for Applied Materials, well, it stands to reason that what's good news for Applied Materials' customers (and according to data from S&P Global Market Intelligence, Applied Materials counts both Intel and Nvidia's contract manufacturer Taiwan Semiconductor Manufacturing Company among its clients) is good news for Applied Materials itself. But there's further good news in the form of a report earlier in the week from the Semiconductor Industry Association, which reported that global semiconductor sales -- while slowing -- still grew 7.3% year over year in July, including 20.9% growth in the Americas, 15.2% growth in Europe, and 13.1% growth in Japan.
Long story short, rumors of the semiconductor industry's demise may have been exaggerated -- and even if things are slowing down a bit, that risk is arguably already reflected in the share prices of Applied Materials (now selling for just 12.2 times trailing earnings) and certainly of Intel (at 6.5 times earnings). Of the three, Nvidia stock still seems riskiest at a 44 P/E ratio.
But with Nvidia stock already down 38% over the past year, even that high price is starting to tempt investors back.
