How 5 Top Semiconductor Industry Leaders Are Managing the Market Downturn

In the context of the recent correction and retreat of the semiconductor industry, an industry that has long been a driving force behind market growth, investors find themselves at a crucial moment. After a period of notable performances both since the beginning of the year and compared to the previous year, the sector has recorded a significant decline. This pullback, however, could reveal an interesting buying opportunity for savvy investors.

The semiconductor industry, led by giants like NVDA, AMD, TSMC, INTC, and SMCI, has pushed the overall market to new heights. Led by innovators like Nvidia, the industry has seen an unprecedented surge, fueled by growing demand for its products powered by artificial intelligence (AI). However, in recent weeks, the winds of risk have shifted, with capital flowing from technology into more defensive sectors and industries such as commodities and energy.

However, with the recent pullback, this could be the perfect time to position yourself for future gains in the sector while getting favorable risk:reward? Could several industry leaders be poised to recover their bullish trajectory and generate substantial returns for those who dare to capitalize on the decline? Let’s take a look at five semiconductor stocks that could be a great buy during the pullback.

5 semiconductor giants

VanEck Semiconductor ETF

The VanEck Semiconductor ETF New York Stock Exchange: SMH is probably the most popular semiconductor ETF, whose top holdings include Nvidia, Broadcom, TSMC, and Intel. Despite falling nearly 5% from its 52-week high in recent weeks, the sector ETF remains up an impressive 30% year-to-date and nearly 80% from a year earlier. The SMH has taken several weeks to assimilate its uptrend and consolidate between a converging 5-day and 20-day SMA, potentially setting itself up for a breakout above $230.

Advanced microdevices

Advanced microdevices NASDAQ:AMD is an extremely popular semiconductor stock, rated very highly among analysts. While the stock is positive by double digits on the year, it has fallen sharply from its 52-week high, down 25% since reaching an all-time high in March. Now that primary support is near $170, it will be essential to see if the stock can reclaim its 50-day SMA at $180 to confirm a higher low and potential upside momentum.

Nvidia

Nvidia NASDAQ:NVDA needs no introduction. The semiconductor and AI giant is at the forefront of innovation and growth in its industry and has helped the market reach new heights in recent months. NVDA briefly entered correction territory yesterday, but after the stock found support near its rising 50-day SMA, it is now down just 6% from its 52-week high. If NVDA manages to spend some time above $900 and several key SMAs converging, it may not present another dip buying opportunity.

Taiwanese semiconductor manufacturing company

Taiwan semiconductor manufacturing New York Stock Exchange: TSM, the world’s largest pure-play semiconductor company, is currently about 7% below its 52-week high. Despite this decline, it maintains an uptrend, with short-term support and a potential uptrend break near $140. Analysts rate TSMC a Moderate Buy, although the consensus price target closely reflects current prices. Investors now wait whether TSMC can sustain its positive momentum and regain higher positions. However, from a technical point of view, the chart does not appear as bullish as that of the stocks mentioned above.

Supermicrocomputer

Supermicrocomputer NASDAQ:SMCI has been on an extraordinary trajectory, witnessing astonishing growth of nearly 800% over the past year and over 200% year-to-date, culminating in its inclusion in the S&P 500 Index. Despite these notable achievements, the stock is now in bear market territory, down 23% from its 52-week high.

Investors are wondering whether this dip represents a good time to buy on the dip or signals an overbought scenario. Buyers remain in control and the stock maintains an attractive uptrend, supported by a relatively low RSI and critical support around $900. However, analysts offer a cautious outlook despite a Moderate Buy rating, aiming to consensus price which suggests a potential downside of just over 7%.

Before you consider Taiwan semiconductor manufacturing, you’ll want to hear this.

MarketBeat tracks daily Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and Taiwan Semiconductor Manufacturing wasn’t on the list.

While Taiwan Semiconductor Manufacturing currently has a “Moderate Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.

View the five stocks here