Chip stocks continue their sector-wide decline, following a sell-off in technology products triggered by disappointing reports from some Magnificent 7 companies. Patrick Moorhead, founder, CEO and chief analyst of Moor Insights & Strategy, joins Morning Brief to discuss the current state of the semiconductor industry.
Moorhead observes that because of the chip sector's strong momentum over the past year, "any hiccup, any rumor about something/" can trigger a decline in stocks. He suggests this slowdown presents an opportunity for investors to identify potential high-growth companies beyond industry giants like Nvidia (NVDA), Broadcom (AVGO) and Intel (INTC). Moorhead advises investors to "consider a medium-term and even…long-term approach to where these stocks are going or whether they're possible," highlighting companies like Qualcomm (QCOM).
Regarding industry trends, Moorhead notes that many companies are moving toward AI, often at the expense of other initiatives. /"They want their IT groups to move towards generative AI. And a lot of that has to do with FOMO, it's the fear of missing out," he explains. This shift in focus is creating a divide in the market: /"This is why you see that companies that are not engaged in the generative AI wave are seeing very mixed results./"
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