Proceed with caution on chip stocks, warns one top analyst.
The major market indexes have entered rally mode over the last month, but the S&P 500 index, Dow Jones Industrial Average, and Nasdaq Composite are all still down anywhere from 10% to 20% year to date. While no one knows where the markets will finish the year, companies that are still reporting high revenue growth rates in this environment certainly have advantages working in their favor and could be home-run stocks in the next bull market. Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and Monday.com (NASDAQ: MNDY) all recently reported fantastic growth rates in the second quarter.
Microchips (also called integrated circuits, semiconductor chips, or just plain old "chips") are like an invisible force powering our everyday lives. The global semiconductor market will exceed $600 billion in 2022, and one study estimates it will reach $1.4 trillion by the end of this decade.