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Since last year, the rising demand for semiconductor chips from several industries has created a huge supply/demand imbalance. The resulting increase in prices has been favorable for the semiconductor industry. While huge investments are helping semiconductor manufacturers increase production, the supply shortage may not end anytime soon.
The increasing need for advanced devices that feature a wide range of innovative technologies should keep the demand for semiconductors much higher than their supply for the foreseeable future. According to a Fortune Business Insights report, the global semiconductor market is projected to grow at an 8.6% CAGR between 2021 – 2028. Therefore, both INTC and AMD should benefit. Interestingly, these two stocks are among the top 15 most mentioned stocks on subreddit r/WallStreetBets. AMD has gained 64.3% in price over the past year, while INTC has returned 11.5%. Also, AMD’s 48.7% gains year-to-date are significantly higher than INTC’s 2.2% returns. Furthermore, AMD is the clear winner with 75.2% gains versus INTC’s negative returns in terms of the past six months’ performance.
