It’s Not All Gloom and Doom for Semiconductors
All you’ve heard is bad news about semiconductors lately. But there’s reason to believe things are starting to look up.
There’s been a lot of talk lately about the worldwide shortage of semiconductors.
Even here at Profit Pregame, we’ve talked about the widespread uses of semiconductors in all manner of electronics, the hardships that the shortage has created for many industries, and the efforts being made to solve the issue.
But despite all of the negative headlines on the semiconductor industry, the best companies have not only been able to stay afloat, but thrive.
One company in particular may have just showed us that demand is still high, and things aren’t as dire for the semiconductor industry as the news has made it seem.
Which could mean big gains for those willing to buy the dip in semiconductors.
Where’s the money?
Yesterday, Micron Technology (MU) released its latest earnings report.
And many were surprised to see MU’s performance exceeded expectations. Earnings per share beat estimates by $0.03 and revenue came in at $6.24 billion – a 30% increase from the same quarter last year.
But perhaps the best part was the outlook that Micron provided for next quarter, in which it predicted revenue would grow to $7.1 billion, despite rising expenses, as demand for semiconductors remains high.
As a result, shares of MU rose by as much as 7.5% during yesterday’s trading.
And as several major world governments are taking measures to alleviate semiconductor supply chain and manufacturing issues, the future could prove even brighter than Micron’s prediction.
Which is why right now might be a great time to jump back into semiconductors after the recent sell-off.
And there’s one play in particular that I like to take advantage of this setup…
How do I get some?
I’ve seen this story play out across dozens of different industries before.
When one stock in a particular sector has strong earnings, then we see similar names in the sector also move up.
For semiconductors, that means potential pops for names like Western Digital Corporation (WDC), Taiwan Semiconductor Manufacturing Company Limited (TSM), and Advanced Micro Devices, Inc. (AMD).
Everyone was concerned about the chip names as the shortage drags on and interest rates go higher, but as we see, the media can sometimes overinflate these things because they need people to watch TV.
The reality is that semiconductors are still one of the most in-demand products in the world, and that isn’t changing any time soon.
That’s why I’m recommending buying shares of VanEck Vectors Semiconductor ETF (SMH) on any pullback. With its holdings comprised of some of the biggest and best semiconductor companies in the world, investors are able to profit from the success of the semiconductor industry without the potential pitfalls of investing in just one company.
Speaking of tech products in high demand…
A new tech product will be hitting shelves by the end of the year. And it isn’t some obscure widget with a consumer base of 100 people.
I’m talking about a product that has 3.1 billion customers worldwide… already built in.
Every year, those customers spend $152 billion on this type of product. Which is why Amazon, Wal-Mart Target – all of these retail outlets are in line to stock up on this device.
And with one deal with a legend of the entertainment industry, you could claim regular royalty checks from this incredible product.
But you have to move before April 15 – that’s the hard and fast cutoff for
In the Spotlight: A New Push from AMC
AMC Entertainment Holdings Inc. (AMC) is currently seeking investor approval to offer as many as 500 million new shares of its stock in the latest bid to weather the pandemic.
While the theater chain is hopeful that it can reopen to higher capacity in the near future, a new infusion of capital is being sought to bolster its financials in the meantime.
As a result of the possibility alone of new shares being offered, AMC stock fell nearly 9% in yesterday’s trading.
With vaccination efforts going well here in the U.S., could this simply be a good opportunity to buy a stock with huge bounce back potential at a discount?
I’m currently reviewing some of my favorite post-pandemic plays that have the best profit potential. I’ll be back next week to let you know where I see the biggest gains as we round the corner on COVID-19, so keep an eye out for your daily Profit Pregame issue.