The semiconductor industry is a “ball of confusion” to investors, just when market mavens crave some stability from chip makers.
That’s causing angst among investors, who should be buying semiconductors right now but can’t—or won’t—pull the trigger, TheStreet's Jim Cramer noted in a recent Real Money column.
One big chip maker stands out in that regard, Cramer said.
"Take Advanced Micro (AMD) - Get Advanced Micro Devices, Inc. Report. This one has wandered in the wilderness for months as Intel's (INTC) - Get Intel Corporation (INTC) Report CEO Pat Gelsinger talks a big game about ending the reign of the upstart. It doesn't matter that CEO Lisa Su has a monster lead on Intel now. Pat loves to say that Intel's back and we want that. The fact is, though, that AMD is still the leader and Su is not going to fight back with words, she is going to fight back with chips.
Read more about the chip sector, the chip shortage and more of Cramer's investing ideas and insights over on Real Money.
"Su did give an interview this week where she talked about how well they were doing and acknowledged the chip shortage. I thought the stock should go up on the story and instead it got hammered. Finally we are getting nervous about the Xilinx approval. We have been waiting and waiting. All that amounts to a stalled stock with a downward bias."
Cramer also pointed to Texas Instruments (TXN) - Get Texas Instruments Incorporated Report and Analog Devices (ADI) - Get Analog Devices, Inc. Report as two additional industry culprits who should represent buying opportunities, but are too “harrowing” to be bought right now. Other semiconductor stocks are in the same state of suspension, but should also be on investor radar screens.
This from Cramer:
I can't tell you how many times I have heard that Broadcom (AVGO) - Get Broadcom Inc. Report will disappoint only to watch it beat the numbers handily. Or Marvell Tech (MRVL) - Get Marvell Technology Group Ltd. Report. Here's one that likes to run into the quarter and then sell down when it reports.
Cramer said that, fortunately, Marvell didn't fall flat this time but that's the first time he's seen it hold. The only one that doesn't act terribly, he added, is Nvidia (NVDA) - Get NVIDIA Corporation Report -- "but need I remind you that it was stalled for ages, too."
It’s worth noting that a semiconductor’s natural state is to rise up as its temperature goes up. That’s not happening right now and it’s vexing to investors who otherwise may be sector buyers, Cramer noted. Still, the upside value shouldn’t be ignored, he added.
"This fabulous group is a ball of confusion until you look where they come from," Cramer says.