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NVIDIA Corporation's (NVDA) Stock Slumped on Thursday for an Inexplicable Reason
The stock of NVDA has been on a downward trend for the majority of this week. The stock dropped as much as 2.9% on Thursday at 12:30 p.m., at 2:00 p.m. ET, the stock was still down 2.2%.
According to a Wall Street expert, the semiconductor sector may be getting a respite.
According to The Fly, Credit Suisse analyst John Pitzer believes there remains potential in the semiconductor business despite unfavourable market sentiment so far this year.
The upbeat remarks followed excellent results from Taiwan Semiconductor Manufacturing Company Limited (TSM), the world's largest semiconductor maker by far. The corporation earned $17.57 billion in the first quarter, up 36% year over year and 11.6% sequentially. Profits were strong, with profits per share increasing by 45% to $1.40. Both figures greatly outperformed Wall Street consensus projections of $16.7 billion and $1.27 billion, respectively.
The results, according to Pitzer, point to upside for the US semiconductor sector, despite the fact that chip stocks tracked by the analyst have plummeted 21% this year. He singled out TSM's top clients, including Apple, Advanced Micro Devices, Intel, and Nvidia, suggesting the findings might be a "tactical respite" from previous trading trends.
Supply chain limitations and chip shortages have plagued the industry this year but TSM's numbers show that the squeeze may be lessening, which is excellent news for NVDA. Only time will tell if the chip scarcity has reached its apex. However, there are other reasons to purchase NVDA stock for long term investors. NVDA reported record sales of $7.64 billion in the fourth quarter, up 53% year over year and a 103% increase in profits per share to $1.18. NVDA stock is a buy for intelligent investors, given the ephemeral nature of any chip shortage.
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