Semiconductor sultans Nvidia (NVDA) - Get NVIDIA Corporation Report and Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report on Wednesday received upbeat commentaries from two analysts, though one of them sees risk.
Nvidia shares recently traded at $217.56, down 0.2%, and AMD was at $108, up 0.3%.
Hans Mosesmann of Rosenblatt Securities has a buy rating on both stocks. He likes the possibilities created by the boom in artificial intelligence, Bloomberg reports.
“The emerging transition to AI production and moderation of Moore’s Law silicon cadence is leading to the biggest semiconductor cycle,” Mosesmann wrote.
Piper Sandler’s Harsh Kumar has overweight ratings on both Santa Clara, Calif., companies, but he’s cautious.
“We see higher-multiple stocks more susceptible to downside risk,” he wrote, according to Bloomberg.
“Broadcom (AVGO) - Get Broadcom Inc. Report is best positioned, given its discounted valuation and sticky software business, while Nvidia and AMD are most at risk, given their higher valuations and exposure to discretionary areas.”
Broadcom recently traded at $480.59, down 0.2%
Kumar feels “confident” about the semiconductor industry’s performance in the short term. But “things may become a bit murky into the second half of 2022, at least relative to current trends,” he said.
Morningstar analyst Abhinav Davuluri likes Nvidia but thinks it’s way overvalued. Last week he put fair value at $138.
“Our fair value estimate for Nvidia … includes a 50% probability that Nvidia closes its pending acquisition of Arm,” he said.
Meanwhile, “[wide-moat] Nvidia reported remarkable second-quarter results with revenue ahead of management’s guidance,” he said.