New Article: Nvidia and AMD Stocks Experience Downturn as Traders Adjust Exposure

Nvidia Corp (NVDA) and Advanced Micro Devices, Inc. (AMD) stocks faced downward pressure on Friday due to reports of traders reducing their exposure to semiconductor companies. The decrease in exposure was attributed to the actions of Bill Baruch, President and COO of Blue Creek Capital.

Joshua Brown, CEO of Ritholtz Wealth Management, who holds a significant position in Nvidia, decided to reduce his involvement with AMD. He believes that the shares of AMD were overbought based on the relative strength index (RSI). Brown intends to increase his stake in AMD once the price is lower.

Various fund managers joined the “Halftime Report” on CNBC to share their recent activities in the semiconductor industry.

Brown highlighted that the semiconductor sector now represents 8% of the S&P 500 index, compared to 4% three years ago. He also noted that Nvidia accounts for 3.6% of the index, equivalent to the entire energy sector.

The RSI is an indicator that assesses the pace at which the price of a financial instrument is driven up or down by traders. It presents results on a scale from 0 to 100. Typically, a reading below 30 suggests that the stock is in an oversold condition, while a reading above 70 indicates that the stock is overbought.

Fund managers, currently seeking profits, anticipate better financial performance, improved stock market behavior, and more favorable price levels to increase their exposure.

Meanwhile, Stephen Weiss, COO and Managing Partner at Short Hills Capital Partners, purchased more shares of Taiwan Semiconductor Manufacturing Company Ltd (TSM) compared to Nvidia or AMD. This decision was influenced by TSM’s stronger price momentum and the absence of Chinese threats to Taiwan, where TSMC has most of its assets. Weiss believes that Microsoft Corp (MSFT) and Meta Platforms Inc (META) could be potential long-term winners.

Thanks to the AI frenzy, Nvidia shares have gained 28% since the beginning of the year and over 211% last year. Its closest AI competitor, AMD, has seen a 30% increase this year and a 140% increase last year.

Analysts see a massive trillion-dollar opportunity in artificial intelligence and consider Nvidia as the leader due to its dominance in GPU technology and chip supply. Major technology companies such as Microsoft, Amazon.com Inc. (AMZN), Meta Platforms, and Alphabet Inc. (GOOG, GOOGL) also have ambitious investment plans related to AI.

AMD shares fell by 0.22% to $179.94 at the last check on Friday.

Image by Shutterstock

FAQ Section:
1. Why did Nvidia and AMD stocks decline on Friday?
– Stocks of semiconductor companies, such as Nvidia and AMD, declined due to reports of reduced exposure by Bill Baruch, President and COO of Blue Creek Capital.

2. Why did Joshua Brown reduce his involvement in AMD?
– Joshua Brown decided to reduce his involvement in AMD because he believes the shares were overbought based on the relative strength index (RSI). Instead, he plans to increase his stake in AMD at a lower price.

3. What were the recent activities of fund managers in the semiconductor industry?
– Fund managers who participated in the “Halftime Report” on CNBC shared their recent activities in the semiconductor industry.

4. What is the exposure of the semiconductor sector in the S&P 500 index?
– The semiconductor sector represents 8% of the S&P 500 index, compared to just 4% three years ago. Nvidia accounts for 3.6% of the index.

5. How does the RSI indicator work?
– The RSI indicator assesses the pace at which the price of a financial instrument is driven up or down by traders. A reading below 30 suggests an oversold condition, while a reading above 70 indicates an overbought condition.

6. Why did Stephen Weiss purchase more shares of Taiwan Semiconductor Manufacturing Company Ltd?
– Stephen Weiss decided to purchase more shares of Taiwan Semiconductor Manufacturing Company Ltd due to its stronger price momentum and the absence of Chinese threats to Taiwan, where TSMC has most of its assets. He also believes that Microsoft and Meta Platforms could be potential long-term winners.

7. What are the growth statistics for Nvidia and AMD stocks?
– Nvidia stocks have gained 28% since the beginning of the year and over 211% in the previous year, while AMD stocks have gained 30% this year and 140% in the previous year.

Definitions:
– Semiconductor companies: Companies involved in the production, design, and sale of semiconductors, which are essential components of electronic systems and devices.

– Fund managers: Firms or institutions that collect and manage investment funds.

– Relative Strength Index (RSI): A technical indicator that measures the speed and changes in the prices of financial instruments, providing insights into overbought or oversold conditions of stocks.

– S&P 500: An index of the top 500 largest publicly traded companies in the U.S. stock market.

Suggested Related Links:
– [Nvidia](https://www.nvidia.com/)
– [AMD](https://www.amd.com/)
– [Taiwan Semiconductor Manufacturing Company Ltd](https://www.tsmc.com/)
– [Microsoft](https://www.microsoft.com/)
– [Meta Platforms](https://meta.com/)
– [Amazon.com Inc.](https://www.amazon.com/)
– [Alphabet Inc.](https://abc.xyz/)

The source of the article is from the blog scimag.news