The sharp decline of the seven giants has provided a good opportunity for long-term intervention
“The greatest danger in times of turbulence is not the turbulence. It is to act with yesterday’s logic.”
It’s not wise to stick to the old ways when facing changes and instability.
This tells us that when encountering new problems and uncertainties, we need to come up with new solutions, adapt to new situations, and not rely solely on old experience.
Especially in this rapidly changing world of technology, economy, and society, only by constantly updating our ideas can we keep up with the changes and seize opportunities.
The seven giants have adjusted and ushered in a good opportunity for layout
On July 30th, AMD’s performance gave a shot in the arm to the chip stocks that have been continuously plummeting recently.
AMD achieved good financial performance this quarter. The company’s total revenue was 5.835 billion US dollars, a year-on-year increase of 9% and a month on month increase of 7%, exceeding the expected 5.72 billion US dollars.
Net profit was $265 million, a year-on-year increase of 881% and a month on month increase of 115%.
Of particular note is the astonishing growth rate of the data center business, with revenue reaching $2.8 billion, a year-on-year increase of 115%.
Supported by strong demand for the AI accelerator MI300, AMD’s data center business has grown significantly!
Within a single quarter, MI300’s sales exceeded $1 billion, surpassing market expectations.
AMD plans to launch MI325X by the end of this year and MI350 by 2025 to compete with Nvidia’s Blackwell.
Su Zifeng said that the company’s AI chips sold better than expected, but the problem of insufficient supply will be postponed until 2025.
The sales of Ryzen CPUs increased by 49% year-on-year, and the sales of Radeon 6000 GPUs also increased year-on-year.
AMD expects data center GPU revenue to exceed $4.5 billion in 2024, higher than the previously predicted $4 billion.
After the sharp decline, Da Mo also expressed optimism about Nvidia
Morgan Stanley is optimistic about Nvidia, believing that their data center business, particularly in AI and machine learning hardware, will be the main driver of the company’s growth over the next five years.
They have designated Nvidia stock as their preferred choice, with a target price of $144, a significant increase from the current stock price.
Although the global economic downturn may affect capital expenditures, they believe that Blackwell’s strong market response can become one of the key drivers of Nvidia’s future growth.
Microsoft’s Financial Report Challenge
The total revenue for the fourth fiscal quarter was $64.727 billion, a year-on-year increase of 15%, with earnings per share of $2.95, a year-on-year increase of 10%.
However, Azure’s cloud business revenue growth fell short of expectations and capital expenditures surged, raising concerns among investors about the long return period of AI.
Azure and other cloud service revenue grew by 29%, slowing down from the previous quarter. Microsoft stated that Azure’s growth will accelerate in the second half of the 2025 fiscal year.
Microsoft’s capital expenditures have soared to $19 billion, with the majority going towards AI related infrastructure, and are expected to continue increasing in the future.
Microsoft is facing challenges such as a long return on investment period for AI and a surge in capital expenditures, but its long-term growth potential is still recognized by investors.
Tech giants may experience fluctuations in the short term, but in the long run, with technological advancements and increasing market demand, these companies are expected to usher in better development opportunities.
If you don’t want to buy a stock, these ETFs can be considered
Semiconductor related ETFs
IShares PHLX Semiconductor ETF (SOXX): This ETF tracks the Philadelphia Stock Exchange Semiconductor Index and covers over 30 major semiconductor companies, including Intel, Nvidia, and TSMC. Having high liquidity and diversified investment characteristics, it is a good choice for investing in the semiconductor industry.
VanEck Vectors Semiconductor ETF (SMH): This ETF tracks the MVIS US Listed Semiconductor Index, which includes major semiconductor equipment manufacturers and chip design companies such as TSMC, Nvidia, and Texas Instruments. The investment portfolio is broad and can capture the overall growth of the semiconductor industry.
SPDR S&P Semiconductor ETF (XSD): This ETF tracks the S&P Semiconductor Select Industry Index, covering approximately 40 semiconductor companies, including small and medium-sized enterprises. A more balanced distribution enables small and medium-sized enterprises to also benefit from industry growth.
ETF covering the seven giants
Invesco QQQ Trust (QQQ): tracks the Nasdaq 100 index, which includes many large tech companies such as Apple, Microsoft, Amazon, Google, Facebook, Nvidia, and Tesla. High liquidity and wide coverage of technology giants make it the preferred choice for investing in technology stocks.
Technology Select Sector SPDR Fund (XLK): tracks selected technology industry indices, including large technology companies such as Apple, Microsoft, and Nvidia. Focusing on investing in the technology industry is suitable for investors who are optimistic about the long-term growth of technology stocks.
Vanguard Information Technology ETF (VGT): VGT tracks the MSCI US Investment Market Information Technology Index, which covers large technology companies such as Apple, Microsoft, NVIDIA, etc. Low cost, suitable for long-term holding, with high growth potential.
IShares U.S. Technology ETF (IYW): tracks the Dow Jones U.S. Technology Index, which includes large tech companies such as Apple, Microsoft, Google, and Facebook. Wide coverage, able to effectively capture the overall performance of the technology industry.
SPDR S&P 500 ETF Trust (SPY): tracks the S&P 500 index, which, although not focused on tech stocks, includes a large number of tech giants such as Apple, Microsoft, Amazon, Google, etc. Diversified investment in various industries, with low risk, suitable for stable investors.
Investors with strong risk tolerance can consider leveraged ETFs
MicroSections FANG+Index 3X Leveraged ETN (FNGU): FNGU is a triple leveraged ETF that tracks the FANG+index, including Facebook (now Meta), Amazon, Apple, Netflix, Alphabet (Google), Microsoft, Tesla, NVIDIA, Twitter, and Alibaba. Suitable for investors who hope to achieve high returns in the short term, but with higher risks.
Direxion Daily Technology Bull 3X Shares (TECL): TECL is a triple leveraged ETF that tracks selected technology industry indices, including large tech companies such as Apple, Microsoft, and NVIDIA. Concentrating investment in the technology industry amplifies returns through leverage, but also increases risks.
ProShares UltraPro QQQ (TQQQ): TQQQ is a triple leveraged ETF that tracks the Nasdaq 100 index, including Apple, Microsoft, Amazon, Google, Facebook, and others. High liquidity and extensive coverage of tech giants make it suitable for investors who want to amplify their returns when tech stocks rise.
Note that leveraged ETFs use derivatives to amplify daily returns, which means their volatility and risk are significantly higher than regular ETFs.
Leveraged ETFs are typically suitable for short-term trading and speculation, but not for long-term holding as they may suffer sustained losses due to daily rebalancing, especially in volatile market conditions.
Before investing, it is recommended to carefully evaluate one’s risk tolerance and investment goals!
Disclaimer: The content of this article is for reference only and does not constitute investment advice. Investment carries risks, and caution is necessary when entering the market.
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