Impatient investors who expected Nvidia (NVDA) and Super Micro Computer (SMCI) to keep rising will need to exercise more patience. NVDA stock may trade in a range at current levels until its next quarterly earnings report.
Analysts dismiss any risks that AI stocks are in a bubble. They believe that AI-leveraged firms are attractive investments ahead of their earnings reports. Cantor Fitzgerald, for example, thinks that storage names would trade higher. This is an unusual assessment. NAND and HDD components are not core to the AI server market. GPUs, which Nvidia supplies, and supercomputer servers from SMCI matter more.
The top stocks to watch in the upcoming earnings season include Applied Materials (AMAT), Advanced Micro Devices (AMD), Seagate (STX), Western Digital (WDC), and Teradyne (TER).
Analysts are most bullish on TER stock. Cantor increased its price target from $120 to $180. The firm believes that the recovery cycle for semiconductor stocks is in the early innings.
Risk
Chip stocks already rose substantially and they trade at premium valuations. This leaves no room for disappointment. However, sentiment is so positive that last quarter, AMD posted a sharp drop in gaming GPU sales in the PC market. AMD stock eventually recovered after only a few weeks.
