Top chipmakers still have room to rise

Article Excerpt

The shares of these two chipmakers are hitting new highs, due to the rapid spread of new artificial intelligence applications and activist pressure. We feel both can go even higher, but advise only aggressive investors to consider adding them to their portfolios. NVIDIA CORP. $114 is a buy for highly aggressive investors. The chipmaker (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 24.6 billion; Market cap: $2.8 trillion; Price-to-sales ratio: 38.3; Dividend yield: 0.04%; TSINetwork Rating: Average; www.nvidia.com) has soared 130% since the start of 2024. That’s largely due to increasingly strong demand from datacentre operators for chips that power AI applications such as the popular ChatGPT online chatbot/search engine. In its fiscal 2025 first quarter, ended April 28, 2024, Nvidia’s revenue soared 262.1%, to $26.04 billion from $7.19 billion a year earlier. Earnings before unusual items also jumped 461.5% in the quarter, to $0.61 a share (or a total of $15.24 billion) from $0.11 a share (or $2.71 billion). Note—all…