This post was originally published on this site
But because geopolitical tensions between Taiwan and China and the reimposition of COVID-19 restrictions could significantly affect TSM’s production, AMD could suffer from its dependence on TSM. In addition, AMD’s overvaluation is expected to turn off investors amid the current market volatility. AMD’s 8.60x forward Price/Sales is 120% higher than the 3.91x industry average. AMD closed yesterday’s session at $107.48, which is 12.3% lower than its 52-week high.
While the global chip shortage puts pressure on semiconductor companies worldwide, strong demand from various industries and increasing government and private investments worldwide should drive growth for some of the leading companies in the space. Consequently, we believe Broadcom Inc. (AVGO), STMicroelectronics N.V. (STM), Amkor Technology , Inc. (AMKR), and Diodes Incorporated (DIOD) are well-positioned to outperform the broader market in the near term based on their latest developments and solid quarterly financials. So, we think these stocks are better investments than AMD now.
