Chip stocks have been on fire in 2024, thanks to the hype surrounding artificial intelligence. This has caused investors to pile into companies responsible for manufacturing the equipment that makes AI possible. However, it seems like investors are beginning to rotate out of the sector, as many chip stocks are falling in today’s trading session. The catalyst for today’s price action appears to be a Bloomberg report, which noted that the Biden administration might impose more trade restrictions on China if companies continue giving the country access to U.S. technology.
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The U.S. has already put restrictions on what type of chips can be sold to China amid fears that it could use artificial intelligence to strengthen its military. However, it seems like the Biden administration isn’t happy with the current outcome. As a result, big year-to-date winners like Broadcom (AVGO), Nvidia (NVDA), and Taiwan Semiconductor Manufacturing (TSM) are down 4.77%, 4.88%, and 5.51%, respectively, at the time of writing.
What Is the Best Chip Stock to Own?
Out of the chip stocks pictured below, analysts seem to have the most upside expectations for Marvell (MRVL). In fact, it has a Strong Buy consensus rating with 28.35% upside potential thanks to its $91.09 price target. Interestingly, hedge funds appear to agree, as they have a positive view of the stock.
