Semiconductor stocks are an important part of my portfolio. I believe they will continue to rise.
Key Reasons I Believe Semiconductor Stocks and ETFs Prices Will Increase
- Increased Demand: Rising demand due to use in various industries such as:
- Electric Vehicles (EVs): Crucial components in EVs
- Personal Computers: Growing PC sales driven by AI-powered PCs
- Smartphones: Increasing smartphone sales with focus on AI-enabled devices
- Data Centers: Demand for high-performance chips due to generative AI and data center build-outs
- Supply Chain Constraints: Challenges from:
- Raw Material Costs: Higher costs contributing to price increases
- Manufacturing Disruptions: Events such as the Russia-Ukraine war, China's lockdowns, and natural disasters
- Industry-Wide Price Adjustments: Price hikes from major manufacturers including TSMC, Samsung, and Intel
- Geopolitical Tensions: Export restrictions and trade tensions causing volatility and uncertainty
- Research and Development: Rising R&D costs as chip complexity increases
I currently own AMD for exposure to the semiconductor sector. If that feels too risky, my second favorite is the SMH semiconductor ETF. Also, Nvidia is super overvalued—don’t sell if you already hold it, but avoid buying more. FOMO makes you lose.