If you wanted to know if the endless growth cycle in the semiconductor would ever reach a zenith, it did. The growth phase in semiconductors is still happening. That is particularly true around AI and datacenters. The rest of the chip market has started to see some slower growth. Some companies may have even peaked in this last growth cycle. That doesn’t mean you should sell all your chip stocks though. It doesn’t mean you should endlessly buy or hold on to all of them either.
Oggonomics is always hunting for new investing ideas for short-term traders and long-term investors alike. Wall Street research reports often are a source of those new ideas. It turns out analysts often get ahead of many news items and trends. Then again, some analyst reports are after-the-fact and are simple housekeeping reports after big news has already happened.
NVIDIA Corporation (NASDAQ: NVDA) is no longer getting analyst price target hikes day after day, and ditto for Broadcom Inc. (NASDAQ: AVGO) and Micron Technology Inc. (NASDAQ: MU). Still, NVIDIA and Broadcom were given key positive reports for investors. Not so much for Micron in a different research call.
DOUBLE DOWNGRADE FOR MICRON
Micron Technology, Inc. (NASDAQ: MU) was on a major growth spurt but that came to a screeching halt this summer. BNP Paribas has issued one of the more critical and negative reports out there and it’s more severe than you see from most analysts. The analyst Karl Ackerman issued a double-downgrade when he downgraded Micron to Underperform from Outperform in his call. He also then absolutely slashed his price target down to $67 from $140 in the call. That was when shares were closer to $89 ahead of the call.
Slowing orders, more risks of cutting China off, a shift into other portions of chips, and supply-demand changes are all cited. Ackerman’s main warning is that Micron will underperform other chip-makers tied to AI all the way through 2025 due to an oversupply of high-bandwidth memory acting as a price crusher on average selling prices. Ackerman even warns the share price could get even worse if prices fall over excessive supplies ahead.
Ackerman’s view was definitely a standout call because of the 40 or so analysts who have ratings there only a couple with Hold/Neutral alongside this equivalent to a Sell rating.
AI BOOM CONTINUES FOR NVIDIA & BROADCOM
Long-term investors had yet another defense of NVIDIA Corporation (NASDAQ: NVDA). Ditto for shares of Broadcom Inc. (NASDAQ: AVGO). Bernstein’s Stacy Rasgon has an Outperform rating on both of these semiconductor leaders, and he named them as his Top Picks in the semiconductor space. His view is that investor sentiment may have taken a pause around AI chips while demand clearly has not paused. The report is after NVIDIA’s Jensen Huang said in a Goldman Sachs conference that AI chip demand remains intense as the company ramps up full production for Blackwell. NVIDIA’s claim is that every company wants in on the Blackwell orders and wants to be first to get them.
Broadcom has had a $195 price target from Bernstein, up from its $165.00 share price on Thursday. NVIDIA’s price target of $150 at Bernstein compares to the current $119.00 share price on Thursday.
THE REMINDER YOU CANNOT IGNORE
Oggonomics always reminds its readers and investors that no single analyst report should ever be used as the sole reason to buy or sell a stock. This features two different reports from two different firms and the lessons should still be the same — do your own research and make you own decisions. The ultimate decision to buy, sell or hold any investment is up to each investor and is a decision that should be made along with their financial advisor.
There are no assurances nor guarantees that any of the prices nor trends outlined by the analysts from Bernstein and BNP Paribas will come to fruition. These opinions and target prices are also from external sources. They are not necessarily the opinions of Oggonomics, and Oggonomics does not have any formal price targets nor ratings on these companies.
