From Nasdaq:

U.S. chip stocks suffered losses on Wednesday, with the main semiconductor index falling 2.1% from its record high after soaring 65% in 2023, its best performance since 2009.

Leading chip stocks, including Advanced Micro Devices, Qualcomm, and Broadcom, contributed to the steep decline in the semiconductor index, which has dropped nearly 7% since reaching a record high at the end of December.

Investors are awaiting the Federal Reserve’s December meeting minutes for insight into potential changes in interest rates. The chip industry has also recently benefited from expectations that the Fed will cut interest rates and optimism about prospects for artificial intelligence.

Nvidia, a top AI-related chip provider, tripled its stock market value to $1.2 trillion in 2023, driving significant gains for the semiconductor sector. However, concerns about a muted recovery for chip equipment sellers in 2024 have been expressed, with advice to invest in specific cloud computing and automotive stocks instead.

Analysts recommend exposure to cloud computing and automotive technology via stocks such as Nvidia, Marvell Technology, NXP Semiconductors, ON Semiconductor, KLA Corp, Arm Holdings, and more. However, a muted recovery is expected for chip equipment sellers in 2024, with some picks being KLA and Applied Materials.

Overall, the chip industry has seen immense growth in recent years, with high expectations for the future, despite recent short-term declines.



Read more: US chip stocks tumble after strongest year since 2009