Please Don’t Buy The Dip In Nvidia Or Other Chip Stocks

What do an iPhone and Nike sneakers have in common?

Both are made by iconic American companies. Both are also made in China.

American goods used to be made in America. Then cheap labor transformed China into the “world’s factory”. Today we get 80% of our air conditioners, 70% of TVs, and 60% of shoes from China. But there’s one disruptive area that America still dominates.

Stocks in this area can produce huge profits (or losses) depending on how the US-China trade war shakes out. In fact, I picked a safe chip-making company as one of my three favorite disruptor stocks for 2019.

The Last Great “Made in the USA” Industry

It’s computer chips.

As you may know, computer chips serve as the “brains” of electronics like your phone and laptop.

These days, chips are no longer just in computers and phones. They’re part of everyday life. Not long ago there was only a handful of chips inside the average car. Remember when you had to crank a knob by hand to roll your car window up?

Thanks to computer chips, that’s all changed. There are 1,500 computer chips packed into a Tesla Model 3 electric car, according to investment bank UBS.

No Country Can Challenge America in Chips

American companies like Intel (INTC), Qualcomm (QCOM), and Nvidia (NVDA) control over half of this colossal $469-billion market.

Chip demand has surged 15X over the past decade. As the use of computer chips has exploded, so has the revenue they generate.

Since 2009, Intel’s revenue has more than doubled. Nvidia’s has surged 240% and Qualcomm’s has jumped 120%.

Computer chips are the US’s third-largest export, according to the Semiconductor Industry Association (SIA).

No country has been able to challenge America’s superiority in computer chips. The reason is their complexity. Computer chips are one of the most complicated and costly things on earth to develop.

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