The rapid adoption of generative artificial intelligence technology has sparked an AI gold rush, and semiconductor companies are at the forefront, supplying the essential technology. As investors focus on the top promising chip stocks, the question arises: are these companies also operating in the “Green Zone”?
TradeSmith offers valuable tools for investors seeking to identify promising chip stocks. The Health Indicator feature is a prime example. This comprehensive metric assesses a stock’s current health, providing an overall rating. It categorizes promising chip stocks into three zones: green, yellow, and red, offering insights on whether to be bullish, bearish, or neutral.
- Green Zone: Stocks here are thriving, showing stability and minimal signs of a shifting trend.
- Yellow Zone: Stocks in this zone have corrected by over 50% of their volatility quotient (VQ). It’s a cue to reassess your position.
- Red Zone: These stocks have corrected beyond their VQ, indicating high risk and potentially signaling an exit.
With this in mind, let’s explore three promising chip stocks currently residing in the “Green Zone.”
top promising chip stocks
1. Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ: AMD) has been in the “Green Zone” for over four months. While it might not have been the first mover in AI chips, AMD is poised for a strong AI growth catalyst with the impending launch of its MI300 AI accelerator chip by the year’s end. Analysts, like Wells Fargo’s Aaron Rakers, express confidence in AMD’s 2024 performance.
Despite its promising outlook, it’s essential to note that AMD is a high-risk stock, with a volatility quotient of 40.32%. AI mania around AMD is expected to persist and potentially strengthen over the next year.
2. Intel (INTC)
Intel (NASDAQ: INTC) recently joined the “Green Zone” just over two weeks ago. While Intel hasn’t witnessed the same AI-fueled excitement as some competitors, its turnaround efforts and the potential of its Gaudi AI chip make it a stock to watch. According to Melius Research’s Ben Reitzes, there is untapped upside potential in INTC stock, though it might take time for investors to recognize it fully.
Intel is classified as a medium-risk stock, with a volatility quotient of 28.03%. As near-term concerns fade, Intel’s AI catalyst may take center stage.
3. Nvidia (NVDA)
Nvidia (NASDAQ: NVDA) has been in the “Green Zone” for over six months, enjoying significant price growth as one of the leading AI chip companies. Recent market fluctuations might raise concerns about fading AI enthusiasm, but there’s reason to remain optimistic. AI’s impact on Nvidia’s bottom line is projected to grow in the coming years, according to sell-side forecasts, making NVDA stock a notable choice.
Nvidia is considered a high-risk stock, with a volatility quotient of 45.51%. While short-term fluctuations may occur, the long-term outlook for NVDA is promising, solidifying its position as one of the top chip stocks to watch.
In conclusion, the AI revolution is driving significant changes in the semiconductor industry, and these three promising chip stocks in the “Green Zone” hold promise for investors looking to capitalize on this transformative trend.