Semiconductor stocks and cryptocurrencies have been generating significant buzz in the market lately, but according to analyst Marc Chaikin, they do not present the same investment opportunities. While the semiconductor sector, particularly artificial intelligence (AI) plays like NVIDIA Corp (NVDA) and Super Micro Computer Inc (SMCI), offer substantial potential, Chaikin is skeptical about the staying power of cryptocurrencies.
Chaikin, founder of Chaikin Analytics, expressed his preference for AI-driven chip stocks over crypto-related names during a recent interview with Benzinga’s PreMarket Prep. He emphasized that when investors buy into the crypto hype, they are essentially purchasing a puff of smoke, whereas investing in AI represents a more serious long-term opportunity.
Although Chaikin recommended sticking with Super Micro Computer and NVIDIA Corp, he also highlighted the importance of taking profits when necessary. For traders who have seen gains in Super Micro Computer, he suggested considering profit-taking around the $1,000 level. Chaikin emphasized that making a profit is a win in itself, and there is no wrong answer when deciding to sell.
In contrast, the recent earnings report from Coinbase Global Inc (COIN) showcased its strong performance, with its stock surging more than 20% in the past month alongside the rising prices of Bitcoin and other cryptocurrencies. However, Chaikin still sees greater potential in the AI trade, as it has broader implications across various technology sectors. He mentioned the positive impact of AI on IT companies, cybersecurity plays, and semiconductor names, while also mentioning Gartner Inc (IT) and Fortinet Inc (FTNT) as worth considering investments.
Chaikin’s bullish perspective on AI stems from his belief that the technology is real and is experiencing a boom. He praised NVIDIA Corp for having the best chips in the market and expressed confidence in the company’s upcoming earnings report, scheduled for release next Wednesday.
In conclusion, while the cryptocurrency market has seen considerable gains, Chaikin advises caution when investing in these volatile assets. Instead, he suggests focusing on AI-related plays, particularly chip stocks like NVIDIA Corp and Super Micro Computer, which offer more substantial and long-term opportunities. The AI revolution is not limited to just semiconductor companies but also extends to IT firms, cybersecurity plays, and other tech sectors. Chaikin’s stance serves as a reminder to investors to carefully assess their investments and take profits when it makes sense to do so.
