The best semiconductor stock to buy in September

Semiconductor stocks have been caught in shockwaves after the latest Nvidia (NASDAQ:NVDA) quarterly results. No doubt, the GPU manufacturer gave a good beating on the earnings, but with such a high bar in the number, the reaction should not have come as a surprise to anyone. Sometimes it takes more than a big beat to move the needle after a stock has doubled in less than a year.

With Nvidia shares down 6.4% from record second-quarter results, the mood for the broader basket of semi-stocks has been set. And it’s a pretty bleak one through September, a historically difficult time for stocks, with notable semiconductor stocks settling slightly into the red in Thursday’s session.

Key points about this article

• Nvidia’s latest quarterly earnings round signaled that the AI ​​boom isn’t going anywhere.
• As semiconductors stumble, dive buyers may have a chance to get a decent price.
• If you are looking for action with huge potential, be sure to grab a free copy of ours brand new “Next NVIDIA” report.. It has a software stock where we are sure it has 10x potential.

The state of the semiconductor scene following Nvidia’s earnings

While the semiconductor business didn’t collapse before our eyes, it hit the brakes a bit as Nvidia’s third-quarter outlook (the GPU maker now sees third-quarter revenue in the $16 billion mark) disappointed many myopic traders who tried to play the fiery GPU maker are going into profits.

For a company that has varied homerun after homerun, a great but not mind-blowing guide just can’t do it anymore. And while those Nvidia numbers had a profound impact on the tech sector and perhaps the market as a whole, Wednesday’s market action (the S&P 500 and Nasdaq 100 were choppy today) seems to suggest that the market (and most semi-stocks) doesn’t need Nvidia to move higher to gain ground.

As its semiconductor peers digest Nvidia’s earnings and the implications for the broader semiconductor market and the AI ​​boom in the coming sessions, there may be an opportunity for dip buyers to go to work. Here are two interesting coin stocks that look tempting until September.

Nvidia

Nvidia shares have been punished after some exceptional gains – that seems pretty unfair to me. Unless you’re trading it, I think you need to look at the nearly 7% drop in a single day as a buying opportunity.

Looking ahead, Nvidia’s incredibly strong but unsurprising quarter suggests the AI ​​boom remains alive and well in the second half of 2024. With numerous AI-focused data centers ramping up spending to meet robust demand and a plenty of AI applications to come online in the coming quarters, enterprises will continue to need the best hardware to run things smoothly. Even if future generations of Nvidia chips don’t improve performance by a notch, the improved power efficiency could be enough to sell potential customers.

Indeed, the company’s next-gen Blackwell chips may have been delayed, but that’s more of a minor Nvidia hiccup than anything for the rest of the semi-scene to worry about. Such a small delay certainly does not speak to the strength of the AI ​​boom at this critical juncture.

Besides, such delays seem so slight that Nvidia shareholders probably shouldn’t take too much notice. The concern already looks more than covered in the stock at less than $118 per share. At 47.3 times the price-to-earnings (P/E) ratio, NVDA’s stock valuation is the most affordable it’s been in some time, making it an excellent buy in September.

Advanced microdevices

Whenever Nvidia makes a big move, you can expect some action in its chip stock Advanced microdevices (NASDAQ:AMD) as well. After Nvidia’s latest profit drop, AMD shares fell 0.6% on the day, slightly lower than the rest of the market. It’s worth noting that AMD shares spent most of the day in the green before the gains were erased in the last hour and a half of trading. Either way, initial reaction suggests that AMD may skip the go and collect $200 as the AI ​​boom continues.

Unlike Nvidia, which came in with a strong rally over the past year behind it, AMD stock has been in a steady decline since peaking in March. Now down about 32% from its high, AMD stock trades at a slight discount to Nvidia at 42.9 times price-to-earnings.

Although Nvidia is the clear leader in AI chips, AMD is more than willing to drop the gloves. Making smart purchases could help the trailing AI chip giant catch up. The latest $4.9 billion acquisition of infrastructure computing company ZT Systems could even the playing field a bit as the tide of AI makes its way through the data center. All things considered, I’m a big fan of the deal and think M&A could be a secret weapon that AMD can use to continue winning the AI ​​race.

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