More Than Semi-Tough
Stocks and exchange-traded funds offer opportunity in the semiconductor sector
In keeping with this issue’s focus on intelligence, let’s explore the recent history of stock in companies that manufacture the brain of the computer: semiconductors. It’s one of the best-performing sectors of 2020.
Some of the best semiconductor exchange-traded funds (ETFs) and an assessment of each one are included in “Noteworthy ETFs,” below.
As shown on the chart in “Strong performers,” below, from the March 2020 low, semiconductors (SMH and SOXX) outperformed both the Nasdaq (QQQ) and the S&P 500 (SPY).
Because ETFs include individual stocks, the 10 most popularly traded semiconductor stocks are listed in “Plenty of action,” below.
Advanced Micro Devices (AMD) and NVIDIA Corp. (NVDA) trade the most at nearly $4 billion worth of stock per day. That makes the liquidity of both phenomenal.
The biggest semiconductor in terms of market capitalization, Taiwan Semiconductor Manufacturing (TSM), is at nearly $500 billion,
and it trades an average of nearly
$900 million worth of stock a day.
Everything on the list, with the exception of Intel (INTC), performed well during the past year. That creates a potential opportunity—buying the weakest stock on the list. Traders can use one of several methods to accomplish it.
Michael Rechenthin, Ph.D., aka “Dr. Data,” is the head of data science at tastytrade.