2 Chip Stocks to Watch Amid Sector Spotlight

Both stocks helped push iShares Semiconductor ETF (SOXX) to a record high

Deputy Editor
Dec 28, 2021 at 11:25 AM
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The semiconductor sector has been highlighted on Wall Street recently, as supply shortages and strong demand send chip stocks higher. Nvidia Corporation (NASDAQ:NVDA) and Advanced Micro Devices Inc (NASDAQ:AMD) -- popular chip names often covered here at Schaeffer's -- helped push iShares Semiconductor ETF (SOXX) to a record high, following heir respective rallies. 

When we last checked in with NVDA, the U.S. Federal Trade Commission (FTC) was suing the company to prevent them from acquiring British tech provider Arm. However, the security quickly recovered from the negative price action that followed. More recently, shares bounced off the $271 region, and are fresh off four straight days of gains, though today the equity is down 1.8% to trade at $303.81. 

It's also worth noting NVDA's Schaeffer's Volatility Scorecard (SVS) sits at a 92 out of 100. This means the stock has exceeded option traders' volatility expectations during the past year -- a boon for options buyers. 

AMD has also been moving higher, with four daily wins in the last five days, after staging a bounce off the $130 level a couple weeks back. Now, with several short- and long-term moving averages lingering below as potential support, the stock is down 1.3% to trade at $152.39.

There is plenty of room for upgrades that could provide tailwinds for Advanced Micro Devices stock, as nine of the 24 analysts in coverage carry a tepid "hold" rating. Plus, short interest makes up 6% of the stock's available float, indicating the stock looks ripe for a short squeeze.

 

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