Latest news with #VanEckSemiconductor
Time of India
2 days ago
- Business
- Time of India
Semiconductor ETF options show caution ahead of Nvidia results
Traders in the options markets are bracing for industry-wide volatility when AI-chipmaker Nvidia reports results on Wednesday, with defensive options contracts on a major semiconductor ETF drawing heavy trading. For VanEck Semiconductor ETF, the largest semiconductors ETF with some $22 billion in assets, about 2.4 put options changed hands daily over the last 10 days against every call option traded, the most defensive the trading has been in about 10 months, according to Trade Alert data. Call options convey the right to buy shares at a fixed price in the future while put contracts offer the right to sell the shares at a given price. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. "The put buying in SMH ahead of Nvidia's earnings reflects growing concern about potential volatility for the entire sector following the report," said Chris Murphy, co-head of derivative strategy at Susquehanna Financial Group. On Tuesday, some 105,000 put options changed hands against about 16,000 call options, by 3 p.m. ET (1900 GMT), Trade Alert data showed. Live Events In one notable trade, one investor last week bought 50,000 put options in SMH that would guard against the ETF's shares slipping about 10%, to below $220, by the end of May. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Nvidia accounts for about a fifth of the semi ETF's assets but due to its dominance in the artificial intelligence market, the chipmaker's influence goes beyond its weight in the fund, analysts said. While investors have been focused on defensive plays in the SMH ETF, options action on Nvidia itself was more mixed, Murphy said. Murphy said investors were selling options to take advantage of heightened volatility expectations around the chipmaker's earnings, meaning they were betting the reaction to the chipmaker's results will not be overly severe. "It's been hedging in SMH while in NVDA they're tactically monetizing elevated premiums ahead of earnings," he said. Susquehanna makes markets in the securities of Nvidia. Interactive Brokers' list of the 25 most active securities by client orders showed Nvidia ranked second, underlining the heightened investor interest in the results. Still, the stock was only one of two names for which investors were net sellers. "That likely reflects some caution ahead of earnings after a solid run," Steve Sosnick, Interactive Brokers' chief strategist, said in a note. Nvidia will be the last of the "Magnificent Seven" megacap tech and growth companies to report results for this period. Their stocks have been mixed in 2025 after leading the market higher as a group in the last two years. For the year, Nvidia shares are up about 0.7%, while SMH shares are up about 1.2%.
CNBC
07-05-2025
- Business
- CNBC
Trump tariffs and export curbs on China cast a cloud over major chip stocks
Illustration of the China and U.S. flag on a central processing unit. Uncertainty — that was the theme during earnings season for the world's biggest semiconductor firms which are unclear on demand for their products as a result of changing U.S. tariff policy and export restrictions that have been place on China. U.S. President Donald Trump's "reciprocal" tariffs took effect in April though they were paused shortly after. The White House also exempted certain tech products such as smartphones and chips. However, the U.S. is investigating imports of semiconductor technology which could come under new duties. Meanwhile, Washington last month added more semiconductor products from Nvidia and AMD to a list of items that are restricted for export to China, building on Biden-era curbs. The changing tariff and China policy has caused consternation among executives at the world's largest chip companies with visible impacts on their busiensses already. AMD on Tuesday said that it expects $1.5 billion in lost revenue thorugh the end of its fiscal year as a result of AI chip export curbs to China, despite topping earnings estimates for the first quarter. Super Micro issued disappointing guidance on Tuesday citing tariff and macroeconomic uncertainty. The company said it would not provide guidance for its fiscal year 2026 until "visibility" becomes clearer. The stock fell 4% in premarket trade. And Marvell said on Tuesday that it is postponing its previously scheduled investor day from June 10 to a "future date in calendar 2026." Shares of the firm fell 4.4% in premarket trade. "We have decided to postpone our investor day given the current uncertain macroeconomic environment," Matt Murphy, CEO of Marvell, said in a statement. Semiconductor stocks have been under pressure this year amid the growing macroeconomic uncertainty and trade policies from the U.S. There is also concern about the demand for AI products even as technology giants like Microsoft and Amazon continue to commit billions of dollars to build data centers. The VanEck Semiconductor ETF , a basket of chip stocks, is down nearly 12% this year. And it's not just U.S. companies that are feeling the heat. Samsung said last month that "demand volatiltiy is expected to be quite high" as a result of tariff policy changes and macroeconomic uncertainty. "Due to the rapid changes in policies and geopolitical tensions among major countries, it's difficult to accurately predict the business impact of tariffs and countermeasures," a Samsung executive said on the earnings call. "There are a lot of uncertainties ahead of us." Samsung is one of the world's largest memory chipmakers. "The semiconductor sector is grappling with a complex mix of demand signals and geopolitical headwinds," Ben Barringer, global technology analyst at Quilter Cheviot, told CNBC by email. Barringer said that Marvell's decision to postpone its investor day "adds a layer of uncertainty at a time when clarity is in short supply," while Super Micro's weak outlook also "raised eyebrows." "With macro uncertainty and export restrictions still looming large, the path ahead for chipmakers remains bumpy, even as underlying demand holds up in certain areas," Barringer added. The U.S. chip industry has sought to show that it is leading in technology versus China and that it should be allowed to sell more product there. Nvidia CEO Jensen Huang told CNBC on Tuesday that China will likely be a $50 billion artificial intelligence market in two-to-three years. "It would be a tremendous loss not to be able to address it as an American company. It's going to bring back revenues, it's going to bring back taxes, it's going to create lots of jobs here in the United States," Huang said. For the last few years, Washington under both Biden and Trump, have looked to use export restrictions to restrict China's access to American technology in areas such as AI and semiconductors. This has prompted Chinese firms to ramp up focus on homegrown technology with companies like Huawei looking to create viable competing products to the likes of Nvidia. Chinese companies such as DeepSeek and Alibaba have also been able to launch high-performing AI models. Nvidia's Huang said there is competition in AI right now but American firms should be able to compete with China. "The United States has to recognize that we are not the only country in that race, that we have competitors. We are confident people, we are a confident country we have confident companies, we are not afraid of a race. We look forward to a race. Just let us go race," Huang told CNBC. "And so I think that now is the time when the United States needs to realize that we need to put the pedal to the metal ... we've just got to go for it. Waiting around, talking about it, trying to hold people back is not necessarily the best move. The best move is let American do American, let us go after it and win it."
Yahoo
05-05-2025
- Business
- Yahoo
Got $100? 1 Artificial Intelligence (AI) Semiconductor Stock to Buy Hand Over Fist Right Now (Hint: It's Not Nvidia)
The semiconductor industry has broadly underperformed the S&P 500 so far this year. With many AI chip stocks trading at hefty discounts, investors may be tempted to pour into the most obvious candidate: Nvidia. Advanced Micro Devices has quietly built a budding data center business, but investors still appear to be discounting the company's long-run potential. It's been a rough year for semiconductor stocks so far. As of market close on April 30, the VanEck Semiconductor ETF has fallen by 13%. To put that into perspective, this is more than double the losses witnessed in the S&P 500 so far this year. Among one of the more notable laggards in the semiconductor space this year is Nvidia, which has seen its market value drop by nearly $1 trillion. Indeed, the rare dip in Nvidia stock presents a tempting opportunity for growth investors right now. However, there's another name in the chip realm that I think is going overlooked. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Let's dig into the entire operation at Advanced Micro Devices (NASDAQ: AMD). At just $100 a share, could AMD stock be your next winning ticket in the artificial intelligence (AI) revolution? In financial analysis, looking at the aggregate totals for revenue and profit often doesn't tell the entire story around a business. Take AMD as a prime example. In 2024, AMD's revenue and net income increased by 14% and 92%, respectively. Although these figures are impressive, they also don't really tell you a whole lot. Furthermore, most investors might simply compare these figures to Nvidia and determine that AMD is an inferior competitor given its smaller size and less robust growth. Savvy investors understand that there's more to the picture. By taking a look at some of the more nuanced details around AMD, investors may come to see that the company is actually beginning to give Nvidia a run for its money. AMD breaks its revenue and operating income into four buckets: data center, client, gaming, and embedded. In 2024, the data center and client segments stole the show. The data center business is particularly important, as this represents AMD's graphics processing unit (GPU) operation that competes directly against Nvidia. Moreover, the client segment includes sales from personal computers (PCs) and electronic devices -- which can serve as a proxy to help gauge AMD's chipset business outside of data centers. Last year, revenue from the data center business grew by 94% year over year to $12.6 billion while operating income surged by 175% to $3.5 billion. The client segment rose by more than 5% year over year to $7 billion in revenue, and transitioned from an operating loss in 2023 to a profit of $897 million. Clearly, these figures are much higher than the 14% revenue growth I referenced above. Unfortunately, AMD's gaming and embedded segments decelerated by 58% and 33%, respectively, last year. The declining sales and shrinking operating profits from gaming and embedded are essentially skewing the overall picture at AMD. While Nvidia still remains king of the AI chip realm, I would not sleep on the pace at which AMD is moving and its potential over the next several years. Over the last year or so, several behemoths in the AI space -- many of which are Nvidia customers -- have expressed interest in complementing their Nvidia infrastructure with alternative providers. Some examples include Oracle, Meta Platforms, and Microsoft -- each of which is training various AI applications on AMD's MI300 accelerators in addition to using Nvidia chipsets. As AMD continues releasing next-generation GPU architectures combined with custom silicon solutions from cloud hyperscalers, I think AMD is in a position to force Nvidia's hand when it comes to price as GPUs are likely going to experience some commoditization in the coming years. Right now, AMD stock trades at a forward price-to-earnings (P/E) ratio of 22.4 -- nominally below that of Nvidia. To add another layer to this analysis, take for instance the valuation disparity between AMD and Nvidia. As of this writing, Nvidia boasts a market capitalization of $2.8 trillion. By comparison, AMD's market cap is $160 billion. While Nvidia is a much larger company than AMD in terms of revenue and profitability, I question whether its valuation should be 17 times that of AMD. AMD is already proving that it can work with some of Nvidia's largest existing customers, and do so in a highly profitable manner. Furthermore, the financial and customer profiles explored above underscore that AMD is still in the middle of scaling its data center GPU operation, suggesting the company is positioning itself for more growth ahead. In my eyes, investors are too hung up on AMD's overall growth and not attributing enough of a premium to the trends in the data center business. For just $100, investors can buy into AMD at a valuation of $160 billion -- a steep discount to the next closest competitor (Nvidia) all while enjoying long-run tailwinds fueling the AI infrastructure movement. I think AMD is positioned to thrive over the next several years and see the stock as a downright bargain at its current price point. Before you buy stock in Advanced Micro Devices, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $701,781!* Now, it's worth noting Stock Advisor's total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 5, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Got $100? 1 Artificial Intelligence (AI) Semiconductor Stock to Buy Hand Over Fist Right Now (Hint: It's Not Nvidia) was originally published by The Motley Fool Sign in to access your portfolio
