What's Going On With Nvidia And AMD Semiconductor Stocks On Friday?

The semiconductor industry, led by Nvidia Corp NVDA and Advanced Micro Devices, Inc AMD, saw a redemption after a Thursday pullback, reflecting an unabated artificial intelligence frenzy.

Meanwhile, key contract chipmaker Taiwan Semiconductor Manufacturing Co TSM won government approval for an additional $10.26 billion to finance the construction of its second fab in Kumamoto, Japan, and a second fab in Arizona using advanced process technologies.

TSMC's second Arizona fab will upgrade its process technology to 2 nanometers, and the second Kumamoto fab will produce chips ranging from 6-nanometer to 40-nanometer processes.

The semiconductor industry had a fruitful week, with Nvidia chief Jensen Huang crediting its success in AI chips to a strategic bet over a decade ago and highlighting its "lowest total cost of ownership" at the shareholder meeting.

Also, recent reports indicate that TSMC is considering advanced chip packaging to capitalize on the AI surge. Nvidia and AMD, among other key customers, have nearly booked TSMC's 3nm process to full capacity through 2026.

Nvidia's stock has gained 205% in the last 12 months, and AMD's stock has gained 48%. Investors can gain exposure to Nvidia via the Vanguard Information Tech ETF VGT and the iShares S&P 500 Growth ETF IVW.

Price Actions: NVDA shares traded higher by 0.02% to $124.02 at the last check on Friday. AMD is up 2.15% at $162.90.

AMD Stock Prediction For 2024

When buying a stock for a longer time horizon, it is important for investors to assess where they think the stock is headed in the future.

When mapping a stock's future trajectory, investors should consider factors including the future earnings expectations and expected performance against a benchmark.

Advanced Micro Devices's revenue has grown at an average rate of 35.99% annually over the past 5 years. The average 1-year price target from analysts is $195.64, representing an expected 20.58% upside in 2025.

While past performance is not a guarantee of future results, investors should also look at a stock's historical performance when compared to both a benchmark index and the company's peers. Shares of Advanced Micro Devices have seen an annualized return of 22.35%, outperforming the S&P500 index by 13.83%. This compares to 26.81% growth in the overall Information Technology sector. Advanced Micro Devices has a beta of 3.03.

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