Nvidia Corp NVDA and Advanced Micro Devices, Inc AMD stocks are trading lower Friday amid reports of Bill Baruch, President and COO of Blue Creek Capital, trimming his exposure to the semiconductor stocks.
Joshua Brown, CEO of Ritholtz Wealth Management, who has a core position in Nvidia, cut his exposure to AMD as he does not want to own both, considering the latter overbought based on its relative strength index (RSI). He looks to boost his stake in AMD at a lower price.
The fund managers joined join CNBC’s “Halftime Report” to share their latest moves in the semiconductor space.
Brown highlighted that semiconductors comprise 8% of the S&P500, up from 4% three years ago. He acknowledged that Nvidia comprises 3.6% of the index as extensive as the entire Energy sector.
The RSI assesses the speed at which the price of a security is being driven higher or lower by traders. This index displays its findings on a scale ranging from 0 to 100. Typically, a reading under 30 suggests that the stock is in an oversold condition, whereas a reading over 70 signifies that the stock is in an overbought state.
The fund managers who are current booking profits look forward to earnings, stock performance, and better price points to gain exposure.
Meanwhile, Stephen Weiss, Chief Investment Officer and Managing Partner of Short Hills Capital Partners, bought more of Taiwan Semiconductor Manufacturing Company Ltd TSM versus Nvidia or AMD due to the former’s pricing power with no impending threat from China to Taiwan where TSMC has most of its properties.
Weiss sees Microsoft Corp MSFT and Meta Platforms Inc META as potential long-term winners.
Thanks to the artificial intelligence frenzy, Nvidia stock gained 28% year-to-date and over 211% last year. The closest AI rival, AMD, gained 30% year-to-date and 140% last year.
Analysts identify a vast $1 trillion opportunity in AI, placing Nvidia in a leading position due to its dominance in GPU and chip supply. Big techs including Microsoft, Amazon.Com Inc AMZN, Meta Platforms, Google parent Alphabet Inc GOOG GOOGL remain aggressively invested in their AI ambitions.
Price Actions: AMD shares traded lower by 0.22% at $179.94 on the last check Friday.
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