The semiconductor sector is facing pressure, with market leaders such as Advanced Micro Devices (AMD) and Nvidia (NVDA) experiencing declines. Chipmaker names have been under pressure since the start of the second quarter despite leading market gains for most of the first quarter.
Yahoo Finance's Madison Mills breaks down the details, providing insights into how pressure in the Chinese stock market is affecting the chip sector.
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Editor's note: This article was written by Angel Smith
Video transcript
- You take a look at chipmakers because some of that momentum that we've been talking about since the start of the year. It's starting to fade just a bit. Many of these chip stocks had been under pressure since the start of the second quarter. You've got Nvidia on your screen there. That five-day look showing declines of just about 4.8%, just about a decline of 5%.
You also see AMD and Intel under a bit of pressure as well. Now the chip maker though leading the market rally. That has been NVIDIA to start the year. It's still up over 70% since January 1. Madison Mills is here to explain this type of action. And Maddie, I think the question is whether or not investors are starting to sour on some of these names that have been leading so much of this momentum.
MADISON MILLS: Well, it's really weird to go into a day like this and have the news that you just discussed with Samsung and then have Samsung stock be down when those numbers are so incredible. So when I see a weird vibe like that, I think how can I figure out what's going on, and sometimes the macro does outweigh some of the fundamentals and the micro. So I took a look at what's going on over in Asia this morning, and it does appear that the Nikkei index is coming off of its highs. We've been talking about this index hitting record-breaking highs despite Japan being near recessionary territory.
But coming off of those highs, and that's going to weigh on some of these names, the NVIDIAs the AMDs, that are impacted by this index, and a lot of the suppliers to NVIDIA and AMD and some of these other chips names are within that index. So that's an indication of some of the read-through to some of those bigger chips names. I also want to take a look at the yen because the yen in Japan is stronger off of a potential pricing in that the BOJ is going to hike again. That might sound familiar because here in the US, the dollar is stronger this morning as we are digesting that jobs print coming in hotter than anticipated much hotter and thinking that the Federal Reserve may not have a reason to cut any time soon.
So that is also pouring a little bit of cold water on some of these chips names as well. Now looking at some of the tech sector movement. Tech was the biggest laggard as of the close yesterday. We are not seeing that so far in today's trade. So I'm going to be interested in seeing how this kind of develops throughout the day. Also, just looking at idiosyncratic moves, when you have a company like AMD that has been seen as very overvalued compared even to some of the other chips names, some of these movements from the macro level might be not an excuse but a reason to take some profit off the top and get out of this name due to some of those bigger movements there.