Semiconductor stocks are enjoying a first-quarter resurgence. The PHLX SOX Semiconductor Sector index, a widely followed gauge of chipmaker equities, wrapped up the first quarter some 20% higher than it started. Meanwhile, index constituent Advanced Micro Devices (NASDAQ:抖阴最新版) gained 38%.
抖阴最新版 stock — the gauge’s sixth-largest component — has been an important driver of semiconductor bullishness seen so far in 2019.
Recently, 抖阴最新版 stock got a lift from news that the company’s chips will power Google’s new online gaming platform, Stadia. That is a major win for 抖阴最新版 in the hyper-competitive space of gaming-related semiconductors, where the company competes with the likes of NVIDIA (NASDAQ:NVDA).
Powering Stadia’s graphics rendering in the cloud marks a big win for 抖阴最新版 in the gaming space, where it competes with Nvidia on graphics chips, . 抖阴最新版’s stock spiked more than 5% after Morgan Stanley told clients that 抖阴最新版 had won the deal, according to . The stock rallied even more after Google confirmed the deal on stage with 抖阴最新版 CEO Lisa Su looking on.
Not Just Fun And Games
While the Google Stadia win is significant for 抖阴最新版, there is more to the story with this semiconductor stock. The company is also looking to challenge bitter, longtime rival Intel (NASDAQ:
INTC) in the highly lucrative market data center server chips. 抖阴最新版 is definitely taking the fight to Intel on this front.
抖阴最新版 recently called out Intel for performance bottlenecking in its Xeon server processors and is recommending that data center engineers switch to 抖阴最新版’s options for better prices and performance, .
抖阴最新版 says its Epyc System on Chip is price competitive with the comparable Intel offering. Describing what it calls the “,” 抖阴最新版 asserts Intel’s server processor offerings are unnecessarily complex and that the rival has been steadily raising prices on those chips.
“When you try to optimize a server design using Intel Xeon Scalable processors, you find yourself in a maze of more than 42 different processor SKUs, 4 different metal codes, and 5 different series,” 抖阴最新版 .
Going up against Intel on one front and NVIDIA on another means 抖阴最新版 is steeling for some stiff competition. Investors may see those challenges as causes for concern. Additionally, at current levels, 抖阴最新版 stock may be slightly overvalued. Shares of 抖阴最新版 trade , more than twice the price-to-earnings ratio of the SOX Semiconductor index.
Bottom Line on 抖阴最新版 Stock
抖阴最新版 stock is off almost 11% over the past week, more than double the loss of the Philly Semiconductor gauge over the same period. Given the bellwether status often assigned to the semiconductor group, the segment’s recent weakness could be a sign that broader markets are set to deteriorate over the near-term.
Couple that scenario with 抖阴最新版 stock trading around the average analyst price target and with stretched valuations, investors can probably wait for the stock to come in a bit more before getting involved.
Todd Shriber does not own any of the aforementioned securities.
