Let's Check on Nvidia, Micron, AMD as Star Analyst John Vinh Weighs In

You kids know John Vinh? 

Vinh is a very highly rated sell-side analyst. He covers technology with a focus on semiconductors and semiconductor-related companies for KeyBanc in the U.S. and Australian markets. 

Vinh is not merely rated at five stars by TipRanks, where four stars out of five are enough to be considered highly rated, he is the 41st ranked analyst according to that service, which I pay for, out of the 8,932 analysts tracked. According to TipRanks, over the past year, Vinh has a .650 batting average with an average return of 24.6%.

Vinh and his team had something to say on Tuesday morning. Apparently, in a note to investors, Vinh sees recent supply chain checks as mixed. He writes that the analog side of the industry does not appear to be able to sustain the increase in bookings reported with first-quarter earnings. This would be largely due to continuing weakness in the automotive space.

On the other side of the coin, demand for generative artificial intelligence-capable chips is still "robust" and this has been supportive of the traditional server market. As for mobile or really, the smartphone business, Vinh sees increasing build expectations for the coming iPhone 16 as Apple AAPL moves to catch up on AI. However, demand for Android devices seems to be waning. All of the above, in a nutshell, has led Vinh to adjust a bevy of target prices.

KeyBanc Adjustments

On Weakness in Analog.... Vinh cut estimates for On Semiconductor ON and Lattice Semiconductor LSCC, while reducing ON's target price from $90 to $85.

On Servers, Memory and AI, Vinh boosted his estimates and target price for Nvidia NVDA from $130 to $180. He also raised targets for Micron Technology MU from $160 to $165, for Marvell Technology MRVL from $90 to $95, and for Monolithic Power Systems MPWR from $850 to $975. Unfortunately, Vinh's checks on Advanced Micro Devices AMD were more mixed than what he found from AMD's closest competitors. AMD's target was cut from $230 to $220.

On Handsets (Smartphones), Vinh increased estimates for Cirrus Logic CRUS, while raising the target from $95 to $130. Vinh cut estimates for Qualcomm QCOM, but increased his target for that name from $205 to $225.

My Focus: Nvidia, AMD, MU

Among those names mentioned, I am long Nvidia, Micron and Advanced Micro Devices. Basically, my idea was to invest in high-end cloud and then AI-capable GPUs, and the memory that they'll need to accomplish all that will be required of them. I correctly saw Nvidia as the runaway name in the space (not a difficult call) and bet on AMD as what I thought would be runner-up in the category. AMD might be number two, but the gap is far larger than I had expected.

I also enjoy investing in both Jensen Huang and Lisa Su, as both of them have made me look smarter than I am over the years. I do not have the same warm and fuzzy feelings for Sanjay Mehrotra as I do those other CEOs as I have both won and lost a few bets on his performance over the years. The issue there is, how does one bet on memory without betting on Micron? Western Digital WDC? Seagate Technology STX? For AI? I'll stick with Mehrotra.

Getting Technical With Nvidia

Readers will see that NVDA consolidated into a base from March into May when the stock broke out once again. Readers will also see that the selloff that followed that breakout had found support at the 38.2% Fibonacci retracement of that earlier breakout. 

Relative Strength is better than neutral but nowhere near being in technically overbought territory. The daily moving average convergence divergence indicator had come off of extended levels, with the histogram of the 9-day exponential moving average still in negative territory, but with the 12-day EMA appearing to curl in such a way as to set up a bullish crossover of the 26-day EMA.

My thoughts? NVDA may very well be trying to develop a new base of consolidation in the area between the June high and the Fib low. That would make the current pivot that June high. 

Though I am bullish on this name and will likely add on this John Vinh target increase, investors must be cognizant that the potential for a double top bearish reversal is real. I'll cross that bridge when I get to it.

Nvidia Strategy

Target Price: $168

Pivot: $140

Add: down to 21-day EMA

Panic: Loss of 50-day SMA.

Micron Technology Chart

Readers will see that Micron has lived within the confines of an upwards sloping Pitchfork model dating back to late last October. Though there remains an unfilled gap from March that would need the stock to trade at $93 to fill, MU has been able to find the support it needs repetitively at its 50-day simple moving average, despite an apparently bumpy road. The stock here, while still riding that 50-day line, is in danger of completing what could be the right shoulder of a head and shoulders pattern. That would be bearish. 

The RSI is neutral. The daily MACD is quite bearish looking. Here our upside pivot is $157. How will we know whether the bullish Pitchfork or bearish head & shoulders are in control? It's all about that 50-day line, kids. It breaks, so do I.

Micron Strategy

Target Price: $180

Pivot: $157

Add: On a successful defense of the 50-day SMA and an upward test of the central trendline.

Panic: Loss of 50-day SMA

Advanced Micro Devices Chart

Readers will see that AMD is breaking out just as we had suspected upon the closing of that large symmetrical triangle. Relative Strength is good. 

The daily MACD is bullishly postured. Vinh cut this target, but his target is still above mine. I think there is more upside in this one. The 50-day SMA was the pivot or launching pad for this breakout.

AMD Strategy

Target Price: $193

Pivot: 50-day SMA

Add: on test of 21-day EMA

Panic: on loss of 50-day SMA.

At the time of publication, Guilfoyle was long KEY, NVDA, MU and AMD equity.