Should Investors Be Buying Semiconductor Chip Stocks Right Now?

The year may be wrapping up but the looming presence of chip shortages seems to be showing no signs of stopping — what can investors do?

Dec. 23, 2021

It’s been over a year and I still can’t buy a PlayStation 5 console anywhere. 

And, according to the exports, my troubles aren’t going anywhere…

Who ate all the chips? 

No, I’m not talking about delicious, fried potato snacks. I’m talking about the global semiconductor chip shortage that has kept me, alongside millions of others, from getting our hands on a next-gen gaming console. 

And it’s not just the gamers suffering. Everything runs on these things including cars, mobile devices, washing machines, toothbrushes — you name it. All thanks to COVID-19-induced bottlenecks in the supply chain as well as an inability to meet increased demand.

So, what’s next?

Arise, the semiconductor kings!

Nvidia, Qualcomm, AMD, and the other chipmakers have never been more in demand. While there is some misunderstanding amongst many investors that there are simply no chips out there, it’s actually a case of not being able to make chips fast enough. The market is demanding, and the chipmakers are getting paid.

However, that’s not to say that investors should go out and buy every semiconductor chip producer stock they can find. This is cyclical and will pass. We’re long-term investors here, think of how these companies will grow in the long run, and if demand for chips eventually wanes.

Look for: 

  • Diverse revenue streams
  • Long-tail growth opportunities
  • Market-leading innovation

There are more than enough semiconductor companies with these traits and more — I even listed a few above. The chip shortage may be creating havoc, but don’t dive blindly into the hype, whether it’s bullish or bearish. 

Think long-term before pulling any triggers.