3 Rising Chip Stocks To Know Now

Chip stocks have been volatile in recent months, exploding earlier in the year but falling more recently on concerns about US tariff policy and Chinese market. Industry watchers have real concerns that US President Donald Trump’s trade policies will impact hard on the international chip trade, affected imports and exports in the two largest markets, the US and China.

In the latest round of international bickering, the US slapped restrictions on China’s Jinhua chip maker, cutting it off from US suppliers, in response to intellectual property concerns. China responds by saying the accusation is baseless and accuses the US of trying to monopolize the semiconductor market. Business communities appear to be preparing for a more adversarial relationship between the countries’ markets. As US Treasure Secretary Henry Paulson said recently, “The American business community has turned from advocate to sceptic and even opponent of past US policies toward China. How can it be that those who know China best. . .  are among those now arguing for confrontation?”

The Philadelphia Semiconductor Sector index, a measure of chip stocks on Nasdaq, shows the changes clearly. The index held steady between 1300 and 1400 from mid-May to early October, before dropping below 1200. The current reading is 1220, and the index appears was trending down at the close of last session’s trading.

Intel Corporation (INTC – Research Report)

Intel is the giant in the room, the 500 pound gorilla of the chip business. The company holds 26% of the semiconductor market, by sales, translating to an annual sales worth $56 billion dollars. Intel reached the number one slot by cornering the PC market in the 1990s, and as PC sales have declined in recent years, Intel has maintained its position by diversifying.

That Intel has succeeded in its bid to remain the industry leader is clear from its recent Q3 earnings report. The report showed a major beat, with total revenue almost 6% over the estimates and earnings per share almost 22% over. The quarterly revenue, of $19.06 billion, was up 19% year over year, and the company also recorded free cash flow for the quarter of $4.98 billion.

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