Chip stocks can’t catch a break.
Weeks ago, we said you may want to ignore them after Apple said it would scrap plans to increase production of its iPhones thanks to weaker than expected demand.”
“Apple has told suppliers to pull back from efforts to boost production of the iPhone models by as many as six million units in the second half of the year, Bloomberg reported, citing people familiar with the matter. Apple will instead aim to make 90 million iPhone 14s by the end of year, roughly the same as iPhone 13 production last year,” as noted by MarketWatch.
Now, unfortunately, chip stocks are taking a hit again, including Advanced Micro Devices (AMD), Nvidia (NVDA), and even Taiwan Semiconductor (TSM).
All after President Biden unveiled new restrictions on chip exports to China. “The U.S. action is designed to slow China’s technological advances and wrest back as much of the chip industry as possible onshore. Under the new rules, U.S. firms must stop supplying Chinese companies with equipment that make advanced chips unless they first obtain a license,” says CNBC.
Until the chaos fades, investors may want to consider the short side of chip stocks.