Chip stocks are poised to overtake NVIDIA

One sector of the stock market as a whole has supported the past two years: Technology fieldWith a certain amount of attention going into Semiconductor industry. As with any popularity cycle in the market, there was one darling name that investors chose to keep their eye on: NVIDIA Co. NASDAQ: NVDA. However, the cycle has run its course, and now that stock is cooling as judged by recent price action.

Over the past three months, a full quarter, NVIDIA stock has oscillated between a negative 4% and positive 8% performance, which can be considered flat at best. All this while other names in the quantum computing space have taken over in terms of attention and performance, e.g. Righetti Computing Inc. NASDAQ: RGTIGiving semiconductors time to adjust to any mispricing opportunities.

This is why stocks falling behind the NVIDIA wave may see their day in the coming months, as these adjustments bring a sense of reality to the market. By meeting these criteria, investors can find potential buying opportunities in names Advanced Micro Devices Inc. NASDAQ: AMD At today’s discounts or even some companies are acting as a major support function for chipmaking, e.g. Excellis Technologies Inc. NASDAQ: ACLS And Kulicke and Sofa Industries Inc. NASDAQ: KLIC.

AMD: Closing the gap on NVIDIA stock

When investors in Advanced Micro Devices stock up against NVIDIA, a few things will become immediately clear regarding this underlying opportunity. First, it’s the price action itself, as NVIDIA stock trades now 90% of its 52-week highWhile the decline of advanced micro devices has slowed down 53% of its 52-week high.

Generally, when there are these significant gaps in price action, there should be a strong rationale behind the market widening spread. Today there seems to be none. In fact, investors could argue that Advanced Micro Devices should start to catch up to NVIDIA’s cooling price action.

The reason for this is the expected earnings per share (EPS) growth coming from Wall Street analysts. For NVIDIA, until the analyst forecast $6.22 in EPS for 2026Bringing an estimated growth rate of 27.5% for the next 12 months. On the other hand, advanced micro devices are predicted to be delivered Up to $4.16 in EPS in 2026, which is a very attractive growth rate of up to 41.5%.

Since EPS and EPS growth typically drive up stock prices and valuations, it would make sense to see Advanced Micro Devices approach NVIDIA. That’s especially true since the market is already willing to pay a forward price-to-earnings (P/E) ratio of 33.1x for Advanced Micro Devices, compared to a 19.5x multiple in NVIDIA stock.

Some would call it expensive; Others will understand that the market will always be willing to pay a premium for stocks it believes will perform well in the near future, reiterating the thesis behind a potential long run in advanced micro devices.

Go laterally with Excellis and Culique

Another heavily rejected area of ​​semiconductor popularity is the lateral industries that support chipmaking, such as manufacturers and machinery providers. This is where both Exelis and Kulicke come into play for investors to consider another potential run for NVIDIA’s money.

Investors can choose from two different setups here. Excellis stock trades at the lowest level based on price action only 46% of its 52-week highProviding a better risk-to-reward ratio for investors to consider, in terms of limited downside compared to potential upside.

Wall Street analysts have come to a consensus Price target up to $155.8 A share for this company, where it trades today, calls for growth of up to 115.5%. This is a great deal for investors to consider. On the other hand, Kulikke and sofa stocks offer a good setup for those who prefer speed.

Trade on 83% of its 52-week highSome more bulls in KLIC stock have up their sleeves, with Wall Street analysts now forecasting Up to $2.82 in EPS for 2026A growth rate of 59.3%. This may explain the recent institutional buying activity in the stock.

Artemis Investment Management decided to increase its holdings in Kulikke stock to 20.6% by January 2025, bringing its net position to a higher level. $9.9 million today. This move also serves as a gauge for investors to gauge how fast participants in this stock can become moving forward.

Before considering Advanced Micro Devices, you may want to hear this.

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