Semiconductor Shakeout: Finding Potential Amidst Turmoil

Key Points

• Last week, semiconductor stocks witnessed a significant decline, with NVIDIA alone losing nearly $200 billion in market value.
• The recent selloff in the semiconductor sector highlighted its susceptibility to market shifts, leaving investors facing tough decisions.
• Amidst a correction and upcoming earnings reports, the semiconductor industry faces a pivotal moment, prompting a closer look at these five stocks for potential opportunities.

The semiconductor sector, usually a beacon of market strength, found itself in a storm last Friday. Shares of NVIDIA Corp. NASDAQ: NVDA closed the day down 10%, wiping out nearly $200 billion in market capitalization. This dramatic plunge sent shockwaves through the industry, leaving many leading names in deep correction, some even in bear market territory.

The recent selloff across the semiconductor sector saw hundreds of billions wiped out in market capitalization, underscoring the sector's vulnerability to sudden shifts in market sentiment. Amidst the uncertainty, investors face tough decisions: cut their losses, hold firm in anticipation of a rebound, or capitalize on the dip by strategically positioning themselves for potential future gains.

Now, in the thick of a correction and with earnings reports on the horizon, the semiconductor industry is at an important juncture. The sector has been the powerhouse driving the market’s growth for the previous year, thanks to the revolutionary advancements in artificial intelligence (AI). So, let’s look closely at five semiconductor stocks to see if opportunity lies within the recent turmoil.

NVIDIA Corp.

NVIDIA has seen a modest recovery following last week's significant selloff. After closing around $750 last Friday, it is trading near $820. Down nearly 15% from its 52-week high, the stock currently sits below its 20-day and 50-day SMA. With this positioning, further downside potential may loom.

However, should NVIDIA reclaim these short- to mid-term simple moving averages (SMAs), a target of $900 could be considered. All eyes are now on NVIDIA's upcoming earnings report scheduled for May 22. This event serves as a catalyst for the semiconductor sector and holds implications for the broader market.

Arm Holdings 

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