When China introduced DeepSeek, it initially sent fears to the technology sector. Markets worried that the low-cost development of AI would hurt chip sales. Instead, Softbank (SFTBY) said it would invest in OpenAI, raising its valuation. The renewed interest helped buoy chip stocks.
Super Micro Computer (SMCI) bottomed at around $30. After it announced preliminary quarterly results, the firm also reassured investors that it would file its financial statements. SMCI stock closed at $55.80, above its 200-day simple moving average.
Intel (INTC) traded below $20 on multiple occasions since last August 2024. The struggling PC chip builder rallied sharply, from below $20 to over $27 in recent trading sessions.
Investors are speculating that Intel will attract buyers. That includes Broadcom (AVGO) as a buyer and Taiwan Semiconductor (TSM) as an investor.
The INTC stock rally is unconvincing. It needs memory chip supplier Micron Technology (MU) to break out of its $90 – $105 trading range. Memory makers are usually forward indicators of chip demand.
On Tuesday, MU stock gained 7.31%, closing at $106.79. However, investors like Ray Dalio’s Bridgewater exited his Micron position in the fourth quarter.
On Semiconductor (ON) also rebounded recently. However, it needs to trade back to around $65 to confirm that the rally will hold. Applied Materials (AMAT) shares also exhibit the same trading pattern. AMAT stock is attracting buyers at current levels.
