Morning Brief – March 25, 2022

Semiconductor stocks are on the move.

Advanced Micro Devices, Intel, Micron, Marvell, NVIDIA…

All moved higher yesterday, and could push even higher.

That’s happening for three reasons.  One, Intel CEO Pat Gelsinger compared semiconductors to oil, suggesting that computer chips will play a central role in international relations in the decades ahead, said CNBC.

Two, the CEOs of Micron Technology and Lam Research are urging the U.S. government to allocate as much as $52 billion for American chipmaking.  China “is investing more than $100 billion supporting their semiconductor industry,” Micron CEO Sanjay Mehrotra said, as quoted by Nikkei Asia. “And hence, it is extremely important that the U.S. does play catch-up with the CHIPS Act, with investment tax credits.”

Three, the shortage issue isn’t ending any time soon.

“The demand for semiconductor chips continues to grow globally, outpacing supply constraints in a global market that has been hit hard by pandemic-driven supply chain woes. Now, ASML, the keystone producer of the lithography machines used to make advanced semiconductor chips, has said that it anticipates a two-year shortage for the industry due to shortages of necessary parts for its machines,” says the Financial Times.

So, if you’re looking for an opportunity this morning, check out the chip stocks.

Markets

  • The Dow is up 89 points to 34,693
  • The S&P 500 is up 15 points to 4,527.50
  • The NASDAQ is up 52 points to 14,816
  • Gold prices are down $3.44 to $1,956.18
  • Bitcoin is up 4.66% to $44,822.12
  • Oil prices are down $2.71 to $109.60
  • The VIX is up slightly to 21.68

 

Trading Tips

The EV boom is accelerating.

By 2030, it’s expected we’ll see up to 125 million electric vehicles on the road.

Fueling the market even more, major automakers are starting to abandon internal combustion engines for EVs. In addition, according to ChargePoint Holdings, “EVs are projected to be 9.9% of new vehicles sold in 2025 and 29.2% 2030 in the U.S. and Europe (compared to 2.6% in 2019).”

Plus, according to a new study by Ernst & Young, electric vehicles could outpace combustion engines in the next 12 years in the U.S., Europe, and China, according to The Street. “By 2045, non-EV sales were seen plummeting to less than 1% of the global car market.”

That’s driving substantial investment opportunities around the world.

Read more here.

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