Four chip names included Nvidia (NVDA) And Taiwanese semiconductor manufacturing (TSM) get optimistic analyst views, even though these stocks are struggling.
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The list of rising earnings estimates in the IBD stock screener found those and other chip stocks trading below their 50-day moving averages. Movements below these support levels triggered sell signals as the sector saw massive selling last week. Still, analysts remain optimistic about their earnings prospects.
Other notable on-screen chip stocks include Broadcom (AVGO) And CLA (KLAC).
Taiwan Semiconductor and other semiconductor stocks were sold on July 17 after former President Donald Trump said Taiwan should pay for its own defense.
Chips shares fell further on Wednesday after executives at Metaplatforms (META) and Google parent Alphabet (GOOGL) warned that their companies may be spending too much on artificial intelligence. But they added that the risks of underinvestment are even greater.
Nvidia stock is tightening
Nvidia shares took a downturn, falling below the 50-day line on Wednesday amid broad weakness in the chip sector. The IBD Leaderboard name is about 5% below the line. Despite the weak action, Nvidia stock continues to rise from its most recent buy points of 92.22 and 97.40.
Analysts see robust earnings growth of 108% for Nvidia in fiscal 2025, and then 37% in fiscal 2026. Nvidia’s quarterly earnings growth is easing, with current quarter earnings expected to rise 137% and then decrease to 75%, 50% and 35%. growth in the next three quarters.
Taiwan Semiconductor, also known as TSMC, is about 4% below the 50-day line. The shares remain above a 148.43 buy point but have erased most of their 30% gain from the entry.
TSMC’s full-year earnings estimates are in Market wave are now showing a 22% increase, with a 27% increase in earnings per share through 2025. The full year EPS forecast has been revised to $6.41, or 22% growth, and $8 .13, or 27% higher, in 2025.
Taiwan Semiconductor exceeded second-quarter profit and revenue expectations on July 18. Quarterly profit rose in the last two quarters after four consecutive quarters of declines compared to strong results a year ago.
Broadcom and KLA remain above buy zones
Broadcom, which was up more than 25% from a buy point of 143.62, is now only about 5% above that point.
Analyst consensus expectations for the fiscal year ending in October are for a 13% increase, more than doubling to a 27% increase in fiscal 2025.
Quarterly earnings growth expectations are accelerating, with 15% growth expected for the quarter ending in July, after four quarters of single-digit growth. The estimate for the quarter ending October calls for earnings per share growth of 25%, followed by increases of 33% and 34% in the next two periods.
KLA has spent a few weeks below the 50-day limit. The stock is 8% above 729.15 from a flat base.
Analysts expect earnings per share to rise 26% for the fiscal year ending next June and then 14% in fiscal 2026. KLA topped fourth-quarter earnings and revenue estimates on July 24. The company also issued earnings and revenue estimates for the current quarter that exceeded analyst expectations. .
The green up arrow next to the full year earnings estimates on the Market wave charts indicate that annual earnings estimates have recently been revised upwards.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
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