The Trust Layer for Market Analysts

The semiconductor industry is experiencing strong demand, driven primarily by the AI revolution and the need for new data centers. The market recently saw a 5% pullback in the S&P 500 in November, which was followed by a spectacular rally into year-end, fueled by expectations of a Fed interest rate cut. The semiconductor sector has outperformed the broader market, with the SPDR S&P Semiconductor ETF (XSD) reaching new highs after a sharp V-shaped recovery in November. Three key semiconductor stocks are highlighted. Credo Technology Group (CRDO) provides reliable plug-and-play copper connections optimized for seamless data operation, replacing traditional copper cabling in new data centers. The stock recently spiked from $180 to over $210 after a blowout quarter but has pulled back to around $157. This pullback is seen as an attractive entry point, with expectations to retest previous highs. A notable risk is Amazon's significant revenue contribution (over 55%) to Credo through AWS Cloud. Wall Street firms are raising price targets, with Bank of America boosting its target to $240. Lam Research (LRCX) manufactures the machinery used to fabricate semiconductor chips, making it an indispensable part of the semiconductor ecosystem. Considered a long-term investment rather than a trade, Lam Research has been a favored stock for over three years and continues to show strong money flow, indicating institutional buying. Despite being near all-time highs, it remains attractive, especially after recent minor pullbacks. Taiwan Semiconductor Manufacturing (TSM) acts as a foundry, manufacturing chips for major companies like NVIDIA, AMD, and Apple. The company expects significant business growth of about 35% in the coming year. TSMC is also diversifying its manufacturing base by building chip plants in the US, a strategic move to align with national policies and mitigate geopolitical risks. All three stocks currently hold bullish ratings on the Power Gauge system.