The semiconductor sector is facing pressure, with market leaders such as Advanced Micro Devices (AMD) and NVIDIA (NVDA) in decline. Despite leading the market's gains for much of the first quarter, the chipmaker's name has been under pressure since the beginning of the second quarter.
Yahoo Finance's Madison Mills breaks down the details and provides insight into how Chinese stock market pressures are impacting the chip sector.
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Editor's note: This article was written by angel smith
video transcript
– Let's focus on chip manufacturers. That's partly because of the momentum we've been talking about since the beginning of the year. It's starting to fade little by little. Many of these semiconductor stocks have been under pressure since the beginning of the second quarter. The screen shows him Nvidia. The last 5 days show a decline of only about 4.8%, or about 5%.
We can see that AMD and Intel are under some pressure as well. Chipmakers are currently leading the market's rise. At the beginning of this year, he was at NVIDIA. It's still up more than 70% since January 1st. Madison Mills is here to explain this kind of behavior. And I think the question, Maddy, is whether investors are starting to get fed up with some of these names that have been leading this momentum.
Madison Mills: Well, it's really strange that on a day like this, news comes out that we just had a discussion with Samsung, and Samsung's stock price goes down even though the numbers are so unbelievable. So when you see a strange vibe like that, you think about how to understand what's going on, and sometimes the macros outweigh the fundamentals and the micros. So I looked at what's going on in Asia this morning and it looks like the Nikkei stock average is coming off its highs. We've been talking about this index hitting record highs even as Japan approaches recession territory.
But coming out of these highs will weigh on some of the companies affected by this index, such as NVIDIA and AMD. It also includes many of the NVIDIA and AMD suppliers, as well as some of the other chip names. index. In other words, this indicates that some of the larger chip names are being read through. I would also like to take a look at the yen. This is because the Japanese yen has appreciated due to the potential for the Bank of Japan to raise interest rates again. This may sound familiar. Because here in the US, the dollar is rising this morning as we digest much higher-than-expected job growth and think the Federal Reserve will have no reason to cut interest rates any time soon. This is because they are doing so.
That means some of the names of these chips are also getting cold water. Here's a look at some developments in the technology sector. Tech stocks were the biggest laggards as of yesterday's close. We don't see anything like that so far in today's trading. So I'm interested in seeing how this kind of thing develops throughout the day. Also, if you look at the idiosyncratic movements, when you have a company like AMD that is extremely overvalued even relative to other chip names, some of these movements at the macro level are not excuses, but actions. This could be the reason for this. Because of the big movement there, some people are profiting from the top and coming out of this name.
